PostNL N.V. (PNL) Earnings Call Transcript & Summary

Good afternoon, ladies and gentlemen. A very warm welcome to our Annual General Meeting of PostNL shareholders. I will be chairing this meeting in my capacity as Chairman of the Supervisory Board. These are unusual times. I felt very unhappy because I was unable to invite you to be here in person. We, therefore, strongly urge you not to be physically present, and most of you have agreed to our suggestion that you should follow the meeting online and vote at a distance. This is a highly unusual meeting with a small number of people in the room because of the coronavirus. And for the first time ever, PostNL shareholders can take part in the vote online during the meeting. A very warm welcome to everyone following us online. For those in the room, we've provided a carton of water for you guests by your chair to keep you going during the meeting. Because of the coronavirus, as we've already informed you, not all members of the Supervisory Board are here. Thessa Menssen and Jacques Wallage are present by telephone, and they will be making presentations in their capacity as Chairman of the Audit Commission and of the Remuneration Committee. In addition, our notary public, Mrs. Cremers, is with us; and our external accountant, Mrs. Overbeek from Ernst & Young with us today. She is responsible for the auditing of PostNL. In addition to Mrs. Overbeek, we've got Mr. Niewold of EY with us by telephone. He signed the statement for the nonfinancial performance statements. A very warm welcome to all of them. I also welcome the Chairman and representatives of the Central Works Council and the representative of the PostNL Continuity Foundation with us. They are following the webcast. The Central Works Council has announced that it does not wish to avail itself of its right to speak at this meeting. Ad Melkert and Jeroen Hoencamp are also with us by phone in the light of the proposal to nominate them to positions on today's agenda. A very warm welcome to both of them. Now sitting next to me at some distance, as you see, of course, we got Herna Verhagen and Pim Berendsen from the Board of Management and our Secretary, Ewout de Wit. Herna and Pim will be telling you more about the impact the crisis has had on PostNL and of course, on our staff health. Ewout is taking the minutes of today's meeting, and they will be made available on the PostNL website. In accordance with the corporate governance code, the draft minutes will be available no later than 3 months from now. After that, you have a 3-month period to make any comments. After that, the Secretary and the Chairman of the Supervisory Board will sign the minutes off. If you wish to receive a copy of the minutes at home, please send an e-mail to Ewout. His e-mail address is on the agenda and also the notice convening the meeting. Now a number of formal aspects of today's meeting, next. The meeting was convened according to the law on the 3rd of March 2020 by publication on the PostNL website and a press release. Registration date was 17th of March 2020. In addition, because of the coronavirus events, a number of further reports to put on the website, giving shareholders information regarding other steps of PostNL felt it obliged to take in order to make today's meeting possible. The annotation agenda and all the annexes and appendixes was also made available for inspection in accordance with the requirements. Regarding who exactly with us here today and the number of votes that can be cast at today's meeting has not yet been calculated. I'll come back to that in due course later at the meeting. What I can tell you is there are currently 493,952,586 ordinary PostNL shares at issue. PostNL does not own any of its own shares. I note, therefore, that all formalities have been observed, which being said, we can make valid decisions on all voting issues. The voting will be online, so we will not be using the voting handsets as we normally do. So it's rather different from what you've become used to at PostNL. There is a slight delay in the audio webcast, which means that voting is open throughout the entire meeting and voting will be closed at the end of the meeting. This means that it's only at the end of the meeting that we will know the results of all the votes. So not after each individual agenda item as normal. So we will be on tenterhooks until the end of the meeting to see the voting results. Now a couple of more practicalities. Firstly, if you have any questions about PostNL services, please contact PostNL customer services. Two, as in every year, some of the presentation you'll be seeing on the screen this afternoon is in English. That is for the benefit of foreign shareholders following the meeting on the webcast. The meeting is, however, in Dutch today, and everything is being interpreted simultaneously. Three, we have invited shareholders to make any questions they may have known to us in writing before the meeting, so we'd know what to deal with, and we will go through each of the questions raised, agenda point -- agenda item by agenda item. Sometimes, we have bundled questions together. Four, anyone in the room who wishes to take the floor, please make sure you put a specific question to the people in the room, and we have a maximum of 3 questions per agenda item per person. I would also ask you please to state your name clearly before you ask your question, for minuting purposes. Number five, in fact, I must ask you please to abide by the health and safety regulations as set up by the Dutch Institute of Public Health, keeping 1.5 meters distance and all the other regulations. In addition, I ask you to abide by the rules of the meeting. I'm sorry to say it is not possible to have any social contact with the members of either Board today. Number six, please do not use your telephone during the meeting. Right. Well, we can now move on then to the management report over 2019, discussing financial events in 2019. Herna Verhagen, who is the Chair of the Board of Management will run through the main events of 2019 first. She will also tell you something about our expectations and hopes for the future. Pim Berendsen, our CFO and member of the Board of Management, will then take you through the financial news of 2019. And they will, of course, discuss the trading update, which we issued this morning. I now give the floor, therefore, to Herna and Pim.

I'll start at Slide #5. I don't see them on my screen. So let's activate those. Since I don't see any slides -- if I press, I don't see anything. Okay. All right. Good. I'll start with an introduction about corona and the corona crisis. Upon the disclosure of the first corona case in the Netherlands, at the end of February, fairly soon afterwards, PostNL started to inform our business continuity management. That means that throughout the organization, from the bottom ranks to the upper echelons, we formed groups to watch every day, what's happening in the company and how we can continue our operations. At PostNL, from day 1, we established 2 main principles. The first principle is the health and safety of our employees and everybody that comes into contact with our employees. From day 1, that's been the main principle for us. That means that we've adapted many of our procedures, and I'll tell you more about that in a moment. The second main principle has been to maintain the post and parcel network in the Netherlands as best we can as well as our parcel network in Belgium because your favorite deliverer -- at this point means that PostNL is very important for social cohesion and ensures cohesion between people who can no longer achieve physical contact, and you can tell that from the deluge of thank yous that our employees and deliverers receive. And you'll see a few examples on this slide, how people thank their post and parcel deliverers. Being part of that social cohesion means a lot to us, and we're very proud of all our people who make this happen day after day. And we have set very clear priorities. Anything medical relating to delivery is top priority, anything relating to food is priority 2, and anything relating to working at home and being at home is the third priority. And that's how we've prioritized all parcels entrusted to us. And the cards that we deliver often serve to -- which people get well soon and encourage them or simply to tell them, "Hi, how are you doing?" This is important service, and we're proud of all our people who day after day make this happen together. Now to be fully operational and continue our primary processes, from the very outset, we've needed to implement all the guidelines of the Dutch Institute of Public Health, the RIVM. That meant a lot of adjustments and changes. And Slide 6 shows you some of those cases. For example, give each other space, as we just mentioned. Keep those 5 feet or 1.5 meter distance. We've implemented that at the workplace. We just changed procedures, relocated machines and attached labels on the floor to show what those 1.5 meters or 5 feet mean. And we also ask people who open their door for our deliverers to keep distance from our deliverers, that's 1.5 meters. So we've introduced contact-free deliveries. So the deliverer drops the package off in front of the door rather than handing it over. And we've also set up -- set this up at our huge operations to show clearly what direction to walk in to guarantee that 1.5 meter distance, and we have handouts for our parcel and post deliveries as well as for the people who sort all these items. Corona has had a major impact on the primary process and all these measures have brought about some inefficiencies. Well, on the other hand, corona also means that there's a lot of sickness due to absenteeism. By now, the sickness due to absenteeism at PostNL has been declining for 2 weeks, but it's still almost double the usual rate. This means that we're even proud of all those people who are maintaining this process with us. And our ability to keep everything operational is attributable in part to our timely start, but it's also because we thought everything out carefully in different scenarios. And from day 1, we thought, together with the team, which scenarios might come about, what would happen at a complete lockdown, how would our organization remain operational. But now, we're also thinking about what social distancing means. So the 1.5 meter distance, what if that doesn't end in May or June, but only after summer or even at the end of the year. So in this case, remaining properly operational also means thinking ahead and thinking in terms of scenarios as to what this will mean for PostNL. And we have always symbolized social cohesion. And I think this is even more symbolic than in regular times, and we're very proud of symbolizing social cohesion. Now on to Slide 7. This morning, we published a trading update that gives you a look ahead to Q1. We care about doing this because of the fact that we're in corona means that things are not as they usually are. In this trading update, we repeated that health -- the health and safety of our people as well as of our partners, consumers and customers is our top priority. And we started very early on with managing our business continuity. We note that corona most certainly does have an impact in March. You can tell that because we are processing far more parcels. In January and February, there weren't very many parcels, but we had far more parcels in March. And in March, we also see a substantially less business post, but far more greeting cards. That means that the average yield in post is high. And having more parcels also means that we have a better price/mix effect too. And together with the cost that we incur for absenteeism due to sickness and our process means that we had a very solid Q1 based on our strong financial position. And in the trading update, we have a strong cash position as well. Now looking ahead, as a consequence of corona, we see many challenges. As I just indicated, our 1.5 meter economy and the consequences if that continues over the long term. But there are also opportunities in e-commerce and in sending greeting cards. Based on a solid Q1, we are still committed to achieve our 2020 targets of EUR 110 million to EUR 130 million normalized EBIT. And we continue to note that the depth and duration of this crisis may impact those results. That's what I had to tell you about corona. Now back to 2019. It feels like that was a very long time ago. And yes, it is in the past, and I'll take you to Slide 9, that -- those are the key takeaways from 2019. Looking at 2019, we achieved a strong business result with improved revenue and also strong improvements in cash in the year overall. We see that parcels continued to grow, and that's important for the PostNL profile. And over 50% of our revenue now comes from e-commerce. Our underlying cash operating income, the UCOI, achieved the top level of the guidance we issued in 2019, which is EUR 150 million to EUR 180 million. Our net cash from operating investing activities equaled -- was EUR 188 million up from the previous year and brought us to a positive yield of EUR 169 million and cost savings in the guidance from EUR 45 million to EUR 65 million brought us to EUR 48 million in cost savings. The guidance was EUR 45 million to EUR 65 million. And important in 2019 was completing the acquisition of Sandd. And since 1 February, the Sandd network has been fully integrated in the PostNL network, and we continue to divest noncore activities in Germany and Italy. And in the meantime, we fully completed divestment in Germany. In Italy, we've signed it, and we're trying to wrap that up before the summer. We're doing well in sustainability. We achieved the top 3 of the Dow Jones Sustainability Index in 2019. And by now, 19% of the last mile in post and parcels is now emission-free. The target is to achieve 100% by 2030. Slide 10 summarizes the financials. As I indicated, we note that revenue was EUR 2.844 billion. The UCOI result was EUR 176 million for the entire year at the top of the guidance, EUR 121 million was the result with Parcels and EUR 76 million was the result from Mail in the Netherlands. Strong improvement of our net cash from operating activities, EUR 169 million and an improvement of EUR 188 million with respect to 2018. The interim dividend is a proposed dividend over the entire year. That's EUR 0.08. And the margin we achieved at EUR 176 million UCOI was 6.2%. So it was 7.2% with Parcels and 4.7% for Mail in the Netherlands and a strong cash conversion of 79%. So financially, we did well that year. Now looking at Slide 11. In 2019, we organized the Capital Markets Day for Parcels. And during that Capital Markets Day, we mentioned that we want to improve our operational leverage, which at the end of the day means that this will lead to improved margins and improving the cash realized, and we also communicated some initiatives to that end. This slide shows where we stand on those initiatives. This means, for example, that in 2019, we've discontinued our second delivery attempt so that people will be able to go to the post office sooner to collect their parcel. It also means that some of the price changes that we announced on the Capital Markets Day had been implemented during the contract negotiations at the end of 2019. For example, peak load and price changes for parcels weighing more than 23 kilograms. Total growth over 2019 reached 12%. And in the last half of 2019, the growth was slightly less compared with the first half of the year. And in Parcels, we're going to continue rolling out a CO2 neutral flow. This is crucial for achieving our sustainability targets. The initiatives we communicated on Capital Markets Day have indeed been implemented and are to some extent, bearing fruit in 2019 and will, in part, be visible for 2020. Now moving on to Slide 12. This is about the integration of PostNL and Sandd. On 22 October, we completed this transaction and started integrating both networks. We achieved this on 1 February. This means that we welcomed 4,300 new coworkers from Sandd, who are now fully integrated in PostNL. It means that we adopted the Sandd volumes, and this -- it also means -- and this also means an additional 30% of our mail volume, and we acquired about 4,000 new customers. And it means that as of February 1, this 30% increase in volume is channeled entirely through the PostNL network. We're entirely on track in realizing synergies, and we expect EUR 50 million to EUR 60 million normalized EBIT run rate in 2022. So even during the corona crisis, we're still on track to achieve this. Now zooming in on the financial results, that takes me to Slide 13. Let's start with Parcels. There, we see the revenue has improved to EUR 1.67 billion as has underlying cash operating income, which has increased in absolute terms from EUR 117 million in 2018 to EUR 121 million in 2019, and the volume growth reached 12.4%. In Parcels, of course, we saw a positive volume effect and a negative price/mix effect because large customers grow faster than small customers and large customers tend to get lower rates. Performance of Parcels Benelux improved. This is thanks to an improvement in volume price/mix. You can see the first results of the initiatives we implemented after the Capital Markets Day. And on the other hand, of course, you also see that our ordinary cost increase is a consequence of the CLA negotiations, and you see that we achieved operational efficiency, too. In Parcels, everything is still focused as I'll tell you more about on improving operational leverage. So for those margin and cash lines disclosed during the Capital Markets Day, we aim to achieve those now. In Parcels, 2019 showed considerable growth and many of the initiatives that we communicated were, in fact, implemented. In Mail Netherlands, as you'll see on Slide 14, we delivered good business performance, and especially Q4 was very good. Addressed mail volume declined by 9.7%. So you see that post continues to decline considerably. We saw a strong decline of the December stamp, so around Christmas or just before Christmas, and we noted that the delivery quality of post delivered was just under 95%. That's especially in the last month of 2019, where we saw that Sandd was not yet integrated, but that parts of the volume were reaching PostNL without the employees. So that was why the quality was just below 95%. Of course, the result was impacted by the acquisition of Sandd. There are EUR 33 million in cost savings there. And the difference with -- to get you to the EUR 48 million are cost savings achieved at the head office. We have a bit less cash out in pensions and provisions and a bit less results from unaddressed mail activities as well. All told a strong Q4 for Mail Netherlands and strong operating performance when we're talking about integration of Sandd. And as far as we're concerned, it was a good year. Now looking at 2020, on Page 16. 2020 for packages was about improving the balance between volume capacity and value. And that relates to improving the margin line and improving the cash lines, too. The expected volume growth in 2020 is 7% to 9%, which is a bit lower than in 2019. There are 2 main reasons for that, and that's pre-corona. First, we see a slowdown in e-commerce market growth. So we see especially in the categories that are fairly mature such as fashion, people are not ordering as much. And the second thing we see is that some customers have started multi-vendorship, which means that they distribute some of their parcels via a competitor. And especially in the start of 2020, that impacted our volume growth. After this effect, we expect the volume growth to realign with market growth. As I mentioned in 2019, after the Capital Markets Day, we immediately started implementing our initiatives to improve yield management. And we do that in part by implementing peak pricing. This will apply in Q4 2020, and there was a price increase of individual post and parcels as well as a price increase for the heavier parcels. And we're also busy generating operational efficiency in our network, in part, by implementing the small parcel sorting system, which enhances our flexibility in both our structure and in setting up new depots. And we have additional efficiency measures on our agenda, such as the duplication and hit rate, distributing the peak throughout the week and the year as well as ongoing investment in digitalization to better serve customers and meeting their needs better and also improving the hit rate. All of this should balance volume growth, corresponding capacity and value creation. On Slide 17, we look at Mail in the Netherlands in 2020. Thanks to integrating Sandd, we added 30% to the volume of our post network. We anticipate the volume decline in 2020 will once again equal 8% to 10%. On average, there's a moderate -- there's been a moderate price increase in 2020, a 4.6% in stamp prices and bulk mail is once again well above inflation. And that continues the pricing policy we've had for years. Sandd products are being integrated step-by-step in PostNL's network, and we respect and continue all existing customer contracts. Of course, we're aiming for that synergy and EUR 50 million to EUR 60 million run rate that we aim to achieve in 2020. And as I said, we're on track. This is how we're going to do that. We're going to optimize the sorting methods, and we're also going to extend our routes and create larger contracts for post deliveries and have more e-bikes so that it's easier to deliver on longer routes, and this will also reduce overhead and will centralize locations as well. Now the last important point for 2020 concerns accelerating digitalization. We now see that the increase in unique consumers in our app continues to grow faster and faster since the corona crisis. That means that now we're adding nearly 20,000 consumers a week as unique downloaders of our app. By now, over 5 million consumers in the Netherlands use our app and that offers a great many opportunities, opportunities to do still more with consumer preferences and to do more about delivering at moments people want and improving customer satisfaction. As for digitalization, we see many opportunities to leverage those opportunities and enhance them. That means that for 2020, we've said that by accelerating digitalization through innovations and investments is crucial to maintain our market position, and of course, we don't stagnate. This takes us to Slide 19. We'll also be thinking about the environment both in terms of sustainability and socially, how we interact with both our employees and our customers. We support 4 SDGs, and you see them listed on this slide. Of course, we will continue to increase the percentage of emission-free last mile kilometers, in part, by investing in green kilometers and that means inventing (sic) [ investing ] in electric vans and biogas vans. As for our people, of course, we want to improve motivation among our employees. It says here, stay healthy before the corona crisis. I think this is all the more important during corona, keeping the people work for us healthy and safe and the people that our people deal with. And of course, customer satisfaction matters. We have 27% consisted of highly satisfied customers in 2019, and we think we can get this figure up above 27%. Financially, 2019 was a good year. We set the foundation for a good future in the post operations by acquiring Sandd, and in communing at our plans on Capital Markets Day, we laid the foundation for improving the operational leverage of our parcel company. PostNL remains a company in transition, which means that we're transitioning from a company of post and parcels to a company that will increasingly be based on e-commerce. That transformation, including the integration of Sandd and our investments in improving the operational leverage of parcels means that we expect 2020 to continue being a year of transformation. And now I'm going to hand you over to Pim to walk you through the financial performance.

Thank you, Herna. Well, let's now go through some of the main financial figures in some detail. Slide 21 is our main financial takeaways. Now you've seen this, of course, but I think it's worth going through this again. The net cash from operating and investment activities was up by EUR 188 million to EUR 169 million. This is thanks to an improvement in operating capital. And revenues is up by EUR 72 million to EUR 2.844 billion. Underlying cash operating income is EUR 176 million. That's towards the top of our guidance and EUR 12 million lower than it was last year in accordance with our expectations. Now we've made an adjustment to the financial metrics, whereby we'll be reporting in a different way from 2020 onwards. It will be -- normalized EBIT will be our main concept of a definition of profit, and free cash flow will be the best way of monitoring the company's cash flow performance. Then the proposed dividend of 2019 is EUR 0.08 per share, which has already been paid out in full as interim dividend, in fact. As you heard, the Sandd transaction was completed in the fourth quarter of 2019, and we are certainly doing well to -- or on the road to achieving the anticipated benefits and synergies arising from that. Then we've had a number of divestments in 2019, Postcon, Germany; PostNL Communication Services; our printing activities; and also, Spotta and Nexive. We're hoping to close the deal on those in the near future. Then a green bond in the market for EUR 300 million, all in all then, this is a really sound performance in financial terms, particularly the second half of 2019. And that stands us in good stead to achieve further growth and improving our cash flow in the future. I'd now like to go on to Slide 22. And here, you can see the key financial metrics once again. And we've -- they're in line with what our outlook predicted. And all these figures, you can see the Sandd acquisition reflected in them. On the right-hand side, you can see the normalized EBIT column. They belong together with the UCOI results that Herna mentioned a moment ago. Now normalized EBIT then is the new way of measuring profit from 2020 onwards. One-off and significant nonbusiness items are dealt with, therefore, separately and explained separately. What that means, in fact, is that what was U of UCOI is now the N of normalization. There's no other real impact other than what we've already told you in -- online other than one point dealing with reorganizations. With reorganizations, they have a cash effect in UCOI, whereas normalized EBIT is where you set the reserves out. Other than that, though, there is no other impact regarding those 2 different definitions of profit. What it does though is it makes us more comparable. And you don't have to explain why our definition of profit is different and always looking into -- at performance on the result. Slide 23. Here, you can see the free cash flow in 2019. How did that go. We started with EUR 176 million UCOI, EUR 25 million one-offs, in particular, to do with Sandd, a number of items there. And we wrote down some Sandd assets because we really wanted to integrate the networks as swiftly as possible. Then there was the last unconditional funding obligation and the number of other project costs arising with it. Next item is depreciation and amortization, EUR 180 million. That's up by EUR 97 million, mainly because of the IFRS 16 adjustments and, of course, EUR 25 million as a result of Sandd. Moving on to CapEx, EUR 66 million. That's EUR 29 million down from 2018. Change in working capital, minus EUR 35 million. It is a tremendous improvement compared with the working capital of 2018. The interest and tax paid, EUR 48 million, and proceeds from disposals, EUR 14 million, which brings us to the net cash from operating and investment activities to EUR 169 million. Because of IFRS 16, a number of items have been transferred to the lower part of the cash flow statement, in particular, these lease payments. That's depreciation and amortization. I mentioned here, we can see them explicitly dealt with here, EUR 62 million. And the free cash flow for 2019, therefore, comes out at EUR 107 million, significant improvement over 2018. Slide 24, profit and loss account in a simplified form, condensed form. We'll come back to talk within due course. You can see revenues, EUR 2.884 billion (sic) [ EUR 2.844 billion ]; operating income, EUR 114 million (sic) [ EUR 119 million ]; net financial expenses, EUR 16 million; income tax, EUR 31 million, leading to profit from continuing operations is EUR 72 million. The loss from discontinued operations is EUR 68 million. That includes, of course, the write-downs arising from the sale of Postcon and Nexive and also the operating results in 2019 in those 2 companies, which gives us a profit for 2019 at EUR 4 million. From profit and loss, I'd now like to move on to the balance sheet. I won't go through every item here. I think the adjusted net debt position is worth looking at. That was EUR 736 million before. That's the gross debt, Eurobonds and pension liabilities, the lease obligations, all in there. And of course, the cash position you see on the other side. The EUR 736 million adjusted net debt, which means the leverage ratio was 2.6 at the end of the year. If we now turn our mind to 2020. On Slide 26, you can see an outlook here. What we can see here is the normalized EBIT we're dealing with in the first half of the year. Let's go together with UCOI figures, which I mentioned earlier. We can see Parcels here, EUR 120 million normalized EBIT in 2019; Mail in the Netherlands, EUR 52 million; the total, therefore, EUR 135 million in normalized EBIT 2019. Then in 2019, there were a number of effects arising from the new legislation, employment regulations making it more expensive to take on temporary staff compared with salaried staff. That had an effect of EUR 10 million on PostNL in 2019. And you can see that very clearly. In addition, the lower interest rates meant that we had about EUR 25 million more pension expenses that we had. But there's not been more cash out because we're already paying the maximum premium for our staff pension. But if we look at normalized EBIT, we do need to set out the costs of pensions and so on for the pensions, and that's EUR 25 million more than the year before. If we move away from those items and have like-for-like comparison between 2019 and 2020, what you're going to see is that Parcels is probably growing from EUR 120 million to EUR 125 million or EUR 145 million; Mail in the Netherlands is benefiting from the Sandd acquisition, will go from EUR 52 million to somewhere between EUR 50 million and EUR 70 million in 2020. In the past, we saw a step-by-step downturn in Mail in the Netherlands. And this time, thanks to the economies of scale with Sandd and cost-cutting measures, we have an increase for the first time for many years. Personnel, other, more or less the same as in 2019, which means that EBIT comes in EUR 145 million to EUR 165 million if we do a like-for-like comparison. Then corrections for pensions and regulations brings the full outlook to EUR 110 million to EUR 130 million for 2020. Regarding cash flow, like-for-like, minus EUR 15 million, plus EUR 15 million. And as Herna said, there's a very important changeover in 2020. This will have an impact on a number of cash flow issues. The acquisition of Sandd and all the integration expenses and so on. These -- all kinds of obligations arising from Sandd has also, of course, increased investment in Parcels, which is where we need to do in order to maintain growth that all together has an effect in 2020. And in addition to that, at the end of 2020, we have to pay the final pension contribution, maximize of EUR 300 million, which means our free cash flow will be minus EUR 315 million to minus EUR 285 million. Now another important thing here on Slide 27. As we look at the main drivers of cash flow, very important one, I think, is to understand how things are going to go from 2020 to 2021. And aside from the development and results, if you imagine trends continuing as they are, then 2021 will see a cash flow which would be about EUR 100 million higher than in 2020. There's a number of important effects leading to that. In 2020, we are -- it's still the last year in which we're paying the soft pension contribution, that would end in 2020. That's a significant amount, about EUR 25 million. Then we've got the change in working capital between EUR 75 million and EUR 65 million negative. That's particularly high in 2020 because we've got a number of final items to wrap up. After that, a delta of working capital will go down to roughly 2019 levels, which will be an improvement of EUR 30 million or EUR 40 million. Then in addition, provisions and pensions, we can see here, should be EUR 30 million, EUR 35 million better, that is currently the case. This means then that we've got improvement in cash flow creation in 2020, and we could see very significant improvement there. Now of course, the Sandd business case and all the synergy and the economies of scale in there should lead to stabilizing or improving developments in Mail in the Netherlands, and there's growth in Parcels as well, which should mean an improved result in Parcels. And finally, Slide 29. Really focusing on striking a better balance with Parcels, growth in e-commerce, improving margins, improving cash flow creation from 2020 onwards, thanks to the Sandd acquisition and achieving the economies of scale. This will bring the world of mail into a stable situation, whereby the result and the cash flow can remain steady. The cash flow creation will be significantly up after 2020. And of course, we want to also continue to improve staff motivation and customer satisfaction. CO2 emission targets, these certainly are setting our sights high. By 2025, we want to be emission-free in 25 cities in Netherlands. And we want to achieve that across the entire country in 2030. That brings me to the end of my presentation.

Well, thank you, Pim and Herna. I'd now like to give the floor to Thessa Menssen, who is the Chairman of the Audit Committee. Thessa is joining us by telephone. She is with us remotely. And so Thessa, I'm delighted -- I can already hear you. That's excellent. Please go ahead with your introduction.

Thank you, Jan. Mr. Chairman, during the introduction to this meeting, it was indicated that Mrs. Overbeek, who -- has final responsibility for auditing PostNL, and Mr. Niewold is also present by phone. He signed the statement for auditing the nonfinancial performance statements. This year, the Audit Committee and the Supervisory Board and the Board of Management had constructive consultations, both at official meetings and outside. We considered in length the quality of the financial records and the internal and external financial reporting based on it. The same holds true for the findings that were noted based on the internal control framework, the findings of the internal audit department of PostNL and EY's observations. Other regularly recurring topics discussed in the Audit Committee's meetings included the main financial indicators that influence carrying out the strategic plan and developing financial results of PostNL, such as cost savings regulations, volume changes, pricing costs and margin changes, competition and investments and economic and market developments. We also took regular note of developments in specific accounting topics and regulations concerning financial reporting. We regularly spoke about following up on actions based on areas of improvement noted by the internal audit department and the external auditor for 2018 as well as the observations during 2019. Understandably, quite a bit of time and attention was devoted to the consolidation and acquisition of Sandd's strategy for Parcels to improve the balance between volume growth, profitability and cash conversion as presented during the Capital Markets Day; improvement of the working capital; and the issue of green bonds. Equity and dividend policy, pension liabilities, the sale of Postcon and Nexive and tax review and planning were discussed as well as well as the reappointment of EY as the auditor. In the Audit Committee meetings, there were recurring discussions about integrity and potential fraud and reports from whistleblowers received consideration as well. Fortunately, in 2019, once again, no cases of material fraud were identified. In addition, the Audit Committee and the Supervisory Board took note of EY's observation together with the Board of Management. The Board of Management was open and transparent in explaining all the observations and discussed possible measures with us and scheduled them. In addition, the chairperson of the Audit Committee and other Supervisory Board members regularly spoke outside the presence of the EY management and the Head of the Internal Audit Department. The most important observations of EY are listed in their opinion, which appears in the annual report from Page 204. EY reports that their audit approach has led to a more substantive audit approach instead of a full control reliance strategy. EY emphasized the importance of ensuring sufficient preventive and automated controls in the future, including sufficient control test documentation to make the internal control framework still more robust. This will reinforce the internal control environment of PostNL and will at the same time ensure that EY has -- can rely more on a control-based audit approach in 2020. The Audit Committee believes that the Board of Management has taken a realistic approach in its decisions and actions. The Audit Committee appreciated the opening constructive outlook of the Board members and the findings of the auditing group alliance with this. Thank you for listening. I'll hand you back to the Chairman. Thank you, Jan.

Thank you, Thessa, for this clear explanation. Now I'm going to hand you over to our auditor, Mrs. Overbeek.

Thank you, Mr. Chairman.

Go ahead.

Good afternoon, ladies and gentleman. In this special circumstance and setting, I'm pleased to elaborate on our operations, auditing PosNL's annual report for 2019. I'm Hanneke Overbeek, and since 2017, I bear final responsibility at EY for auditing PostNL. The content of the annual financial statements are the responsibility of the Board and the Supervisory Board members, and they've discussed them. I'm responsible for auditing the financial statements, and I'll discuss the audit. As you've read in PostNL's annual report, as in previous years, we've issued 2 statements. One is the independent auditor's report for the financial accounting, which appears on Page 204 and beyond as well as a statement in the independent auditor's report concerning the nonfinancial performance statements as included in the annual report on Page 240 and beyond. The auditor's report was issued by me for the financial accounts and the auditor's report for the nonfinancial performance statement was, as in the previous year, issued by my fellow partner, Jan Niewold. I'll discuss the highlights of our audit and our main areas of consideration and conclusions, and finally, I'll make some concluding remarks that relate to my opinion for you as a shareholder. Before we start the audit, we make an inventory of the most important changes and risks and set a materiality for the maximum possible deviation in the figures of PostNL without the statement needing to be adjusted. Throughout the year, we continue to review this and adjust as needed. For the audit of the 2019 financial statements, we set materiality at EUR 7.5 million, calculated based on the adjusted operating income. Specifically, this means that the operating income and 2 important one-offs were adjusted concerning the purchase of Sandd. These related to the provision for reorganization and the cost of accelerated writing -- write-off of assets because we audited these integrally before setting the materiality. Any audit differences that were greater than EUR 375,000 were reported to management and Supervisory Board. Based on the risk-driven approach and materiality, we determine which business units and -- require which duties. Except for the Sandd-related entities, the audit of the Dutch business units was carried out by our Dutch team. For Sandd, the duties for the consolidated financial statements were carried out by Sandd's auditor. The audit for the entity in Hong Kong as well as the specific duties in Italy were performed by our EY coworkers on site. We have also instructed a Sandd auditor and our local coworkers through instructions about the duties to be performed so that we can take note of the consolidated financial statements in our audit. We also commission various experts in our audit, including experts concerning valuation, tax matters, IT and pensions. The most important risk areas we identified in our audit are known as key audit matters. These are the highlights of our audit. We discuss these in addition to several other matters as previously identified by the Chairperson of the Audit Committee, and we -- so we discuss them periodically with senior management, the Board of Management and the Supervisory Board. The highlights in 2019 were the valuation of Nexive, including the related deferred tax asset as well as processing the sale of the operations of Postcon in the key audit matters. In our statement, they've been jointly identified as discontinued operations. The purchase of Sandd, and specifically, the related valuation of the intangible fixed assets purchased, those are client contracts as well as determining various provisions. Third was the accrued items in relation to the revenue. And finally, the valuation of Mail investments in the corporate financial statements. The impact of legislation regulations on the valuation of PostNL were not included as a key audit matter because there were very few developments concerning this discussion about significant market power that this key audit matter concerned. In our auditor statement, we reported on these highlights as well as the risk that we identified in 2 items to select the most important audit activities. I'll touch on 2 of them. Discontinued operations. As already stated, in the course of the year, the German operations were sold, and we have determined that the sale was properly accounted for in the financial statements. On 31 December 2019, management had advanced well into the negotiations concerning the sale of Nexive and the valuation of Nexive was set at an underlying binding offer that management received and accepted in February of this year. We determined that the valuation of Nexive would be based on this binding offer. In addition to the results of the sale, there is the opportunity to settle what are known as liquidation losses with the Dutch tax authorities. We've determined that this receivable has been properly calculated. Now the acquisition of Sandd. The purchase of Sandd is a new key audit matter for this year. On 22 October 2019, PostNL acquired Sandd. The accounting -- according to the accounting rules, acquired assets and liabilities need to be valued at real value. We challenged the firm in the valuation of intangible fixed assets, and specifically, in client contracts as well as the timing and amount of relevant provisions and the depreciation period of various assets. You will find additional details about key audit matters in our auditor statement that you'll find on Pages 208 to 210 of the annual report. In addition to auditing the financial statements, we audited whether the nonfinancial statements and other sustainability information included in the annual report meet the international guidelines that apply. This means that we determined whether the nonfinancial statements accurately convey the policy, activities, events and performance and sustainability. And we also audited the reliability and consistent calculation of various material performance indicators. These include CO2 emissions as well as the share of emission-free delivery, and what's known as the last mile. We also determined that these most important indicators have been properly explained. Finally, we also assessed the other aspects of the annual report, such as the business report governance section and the other data. This year, we paid special attention to the remuneration report to determine that it meets the new requirements resulting from legislative amendments on the topic. The main conclusions. You've read that we have provided unqualified opinions for the financial statements, including the nonfinancial statement. This means that based on the duties we performed, we have concluded that the items have been correctly included and explained in the financial statements and that there are no material audit differences that still had to be entered. In drafting the financial statements, estimates by management are always involved. Please note that the estimates by management in the context of compiling the financial statements have been balanced and consistent, and we do not have any difference of opinion with the management. Regarding material aspects of sustainability information, we conclude that this information is faithfully conveyed, and we did not observe any material inaccuracies in the sustainability information contained in the annual report. As for the other aspects of the annual report, we assessed them and determined that there were no material inaccuracies there. Now some concluding remarks. As in previous years, our relationship with management is open and discerning. Our remarks and recommendations are discussed, and wherever necessary, management takes action. We also have an open and transparent relationship with the Audit Committee and with the Supervisory Board. We frequently report on our findings, both in writing and orally. Please note that we regularly have face-to-face consultation with the chairpersons of the Audit Committee and the Supervisory Board. Thank you for your trust. And I'm pleased to hand you back to the Chairman.

Thank you very much. That was an extensive introduction. I'd now like to move straight on to deal with any questions. Questions might be regarding the Board of Management's report, the Supervisory UHBoard's report and the financial statements. When it comes to remuneration, remuneration policy will be discussed as a separate agenda item. As I said, we'd first like to go through questions that have been sent by e-mail. The deadline was this morning. Herna, please go ahead.

Of course. We'll start with questions from the VEB concerning the trading update we issued this morning. One question concern the impact of the corona pandemic on the financial targets of PostNL as disclosed. As we indicated in the trading update today, we expect a solid first quarter in 2019 -- excuse me, says the speaker, first quarter in 2020. And regarding the full year outlook, we've indicated that the management is dedicated to realizing EUR 110 million to EUR 130 million based on solid results in Q1. Of course, we don't have 100% certainty because we don't know how long this crisis will last or how extensive the measures will be that may be taken. But we're entirely committed to achieving EUR 110 million to EUR 130 million. The second question concerns additional loans, credit and other financial support that PostNL needs in the medium or long term. As we mentioned in the trading update, we have a strong financial position. And at the end of Q1 2020, our cash position was EUR 485 million. That's separate from a EUR 400 million revolving credit facility that we have not used to date. In other words, the Board of Management assesses the financial position of PostNL as strong and having sufficient cash resources. The next question was, which strategic corporate scenarios have been drafted by the Board of Management as a result of the corona crisis? As I mentioned in my presentation, we started from day 1 on drafting scenarios that include the present one as well as more serious scenarios such as a complete lockdown. And now we're working on scenarios as to what will the effect be if social distancing endures for a long time? I believe that the benefit of starting so quickly was that we have been able to set the health and safety of our employees as a priority. So we've been able to maintain the operations in both post and Parcels and to serve a very important social purpose. Next, there was a question as to the extent to which we expect corona to impact PostNL's dividend policy or actual PostNL dividend. Let's take that one on Board when we discuss dividend. Then, [ Mr. Bunk ] asked another question about the fact that corona increases the work burden on our employees. And he also asks whether we can always comply with the RIVM, Dutch Institute of Public Health guidelines, such as the 1.5 meters of distance? At this time, we have more parcels. And that means that additional parcels are delivered by our deliverers. That means that more people are now working both in preparing the sorting process and for the deliverers to process all that volume. And as I indicated, in the past 3 weeks, we increased our capacity by 40% to accommodate the weekly volume, and part of that is by achieving greater efficiency. We have a higher hit rate. We have -- we are more people at home now. The traffic congestion has declined. So we can deliver more rapidly, and we hire more people. We've made a lot of adjustments in our processes to guarantee the 1.5 meters. It's about displacing machines as well as installing plexiglass, giving people hand gel and a hand sanitizer and organizing special walkways. And as for home deliveries, we've adjusted the procedures, as I explained in my presentation. Then a question was asked by the foundation for legal protection of investors. You mentioned that bulk post has declined, and the additional decline was offset in part by a positive price mix effect. And the question is, does this also explain the fact that major customers such as the Internal Revenue Service agreed to your higher rate? Or are they still negotiating about that? As we mentioned in the trading update, the positive price mix effect is because we're delivering more greeting cards. The Dutch people are thinking of each other and sending each other greeting cards. Contracts such as our contract with the Internal Revenue Service, which was a contract with Sandd will be respected by us, which means that rates will be negotiated only when the contract is about to expire and not when it is still in effect. Those were the questions about corona and the trading update. Next, the questions asked following the annual report and the presentation. First question is about value creating -- creation in general. The first question is from the VEB Association of Stockholders, which is as follows. After the offer of EUR 5.75 blocked by the politicians from België post regarding our current share price, and what about the dividend for the acquisition of Sandd for the next 1-2 years? What are the prospects for investors in PostNL? Over the years, we made important steps in our strategy and our ambition to create value in our operations by being the favorite deliverer in Benelux. We've seen strong growth in Parcels. In that segment, we envisage future growth, and we're well in track in our transformation to e-commerce companies. And we're a company with a healthy financing structure. We resolved our pension problem and are focusing explicitly on Benelux after selling Germany, Italy and acquired Sandd in 2019. We're confident that thanks to the measures we've taken as well as by improving operational leverage in Parcels, we can strike a good balance between growth and value. And in Mail in the Netherlands, from the second half of 2020, we'll experience this synergy effects of the consolidation will become visible in part by -- and by realizing them, we expect that in the next 20 to 24 -- in the next 12 to 24 months after consolidating Sandd, we want to get back to leverage ratio where we can start paying a dividend. Again, in Pim's explanation of the results for 2019 and his outlook for 2020 and the changes heading into 2021, we indicated clearly why we expect that in 2021, we will achieve a higher cash flow result than in 2020, which will largely benefit shareholders. 2020 is an exceptional year. This is in part because of the major payment we still intend to make for the transitional plan and also the older -- early retirement processes, the soft pension. We have additional cash from the consolidation of Sandd and a relatively large payment for settling international post transport services. 2020 is a transformative year. It's a turning point. And in 2021, we will address these special elements such as payment of soft pension and the cash out position for Sandd, and settlements for international transport services will no longer be in the figures. So that will, by definition, have a positive effect in our ability to generate cash. Now the follow-up question from the VEB is that PostNL with its market share of 60% in post and Parcels is the market leader in the Netherlands. This holds even more true for the Mail operations. How is it possible, nonetheless, that no significant earnings are obtained from post? And I propose discussing this when I elaborate on Parcels and Mail Netherlands. Next, value creation with respect to bpost and the possible split. Mr. Bunk and Mr. Brookman asked questions about the rejection of the offer from België post, on the one hand, value creation through the split of the post and on the other hand through merge with the competitors such as Deutsche Post. Would this be as -- an option similar to Air France-KLM? We're confident about our stand-alone strategy and our special financial position. As indicated in the past year, we've demonstrated that we're successful in transforming our company. By now, our company has changed over 50% of its revenue from e-commerce. In addition, we addressed some of the problems we had including one with the pension fund and solved them in 2019. And for -- we did a crucial acquisition of post -- of Sandd, which this is crucial for PostNL to maintain robust post operations in the years ahead. So we're not considering a merge. In our company post and mail activities are very important. The back-end is largely combined. When we talk about a split, we think that, that would be very challenging because of the combined back-end, the retail network is combined, we have combined rides, we have combined transport and collection. Some of our postal products are distributed in the parcel network including registered post. That's why our growth ambition is based on a combined ambition of post and parcels, and we believe that splitting the company is not a wise idea.

Okay. Then we had a number of questions on the [indiscernible] value creation and the share prices, and whether the share price shows market confidence in our strategy with problems with the communication strategy. And why when results are so good, the share price has been going down for years? In 2019, it really was a year that we can pat ourselves on the back for. It's a year in which we made a lot of strategic process -- progress, vital of importance, of course, was taking Sandd over, and thus making Mail in the Netherlands affordable and readily available and accessible. This is very good news for our shareholders because it really enables us to achieve economies of scale, which is why all are countering the downturn in the results of Mail in the Netherlands so we can have more cash flow creation in the future. Now integration was completed on the 1st of February this year. According to plan, we have achieved reductions in costs. We've had a significant progress in the way we've implemented, streamlined in way of operating the company. We can see the initial effects of this improvement, improved efficiency. We can see this coming through on the markets. This means then that in 2019, we came up towards the top edge of our guidance bend, particularly because of very good performance in Mail in the Netherlands. Now 19% of our mail and post is emission free in delivery and 27% of our customers say they are highly satisfied. We want to build further in 2020 on the foundations of 2019. What is certainly the case, as Herna has said a moment ago, 2020 is an important changeover year. In 2020, there's a number of significant changes coming through on my financial metrics. These are nonrecurring issues. The question of unconditional pensions, head costs improving -- increasing investments in Parcels in order to improve growth in Parcels in the future. All of these things might look negative if you focus only on 2020. But if you look at the medium term and the long term, you can see Sandd fully integrated, profile of Parcels is looking good in the future, unconditional pensions are done and offered from 2020, either for taking the view that from 2021 onwards, we will see speeding up of cash flow, we'll see profound fine dividend policy, and this should lead to better yields for our shareholders.

Okay. Then we'll continue with questions about value creation asked by the VEB and [ Mr. Swinkels ]. These questions relate to mindset return of share price, et cetera, by PostNL and relate to reverse split of the share. As we indicated and as Pim explained, we're confident in our stand-alone strategy and our special financial position. We've taken important steps in achieving our strategy and in our ambition to create value in our activities by being the favorite deliverer in Benelux. Important parcel growth is important for this both and that will be the segment for the future. We're well on track in our transformation to an e-commerce company, and we have a very healthy financing structure. We've resolved our pension issues and are explicitly focusing on Benelux; have acquired Sandd; and by now, integrated fully; and are on track to achieving the run rate synergy in 2020 to the tune of EUR 50 million to EUR 60 million. 2020 is the year of transformation. In 2021, we expect a positive effect in our ability to generate cash, and we've already explained why no payment of soft pension, no additional cost for consolidating Sandd and no special payments to foreign postal services. Of course, we do understand that the share price is disappointing, but that's up to the market. We are not considering a reverse split of our share. Next question is about Mail in the Netherlands and about Sandd. The VEB asked a question. The acquisition of Sandd seems to be a temporary solution for an ongoing problem because the ongoing shrinkage of the market, in a few years, the volumes -- the volume increased by Sandd will have dissipated. How long can PostNL continue cutting to accommodate this? Mr. Brook asked why EUR 30 million was paid for Sandd. The annual reports in 2017 and 2018 made clear that Sandd was not able to meet its bank covenants. As we've indicated previously, consolidation was the only solution to keep the postal market in the Netherlands reliable and accessible and affordable in a market that will continue to shrink in the years ahead. And this was the best way to protect jobs in this postal market. Other scenarios are worse for stakeholders and are worse for PostNL, and ultimately, for our shareholders as well. Consolidation will enable us to give our shareholders the best possible prospect of direct value creation. As previously indicated, consolidation and integration is proceeding entirely according to plan, and we expect that the previously presented business case in run rate synergies of EUR 50 million to EUR 60 million should be achieved by 2022 -- excuse me, 2020. With the additional volumes from Sandd, we gained 3 to 4 years that yield synergies and provides time to adjust the network gradually. And of course, these synergy effects justify the amount we paid. In addition, we're convinced that ultimately, other solutions would have been found for Sandd had this acquisition not taken place. Consolidation generates cost synergies and helps us accommodate the ongoing decline in volume and that's the most important economic argument for acquiring Sandd. Following the integration period, consolidation will contribute to a sustainable and more predictable cash flow in our Mail segment in the Netherlands. And the specific regulation framework is on our side. Sandd has undoubtedly already considered various future scenarios. PostNL did likewise. And as you know, in the postal dialogue by the government and other market parties, ample consideration was given to possible other routes in ongoing shrinkage on the postal market. The outcome was consistently the same. A longer and less predictable period of competition would have disrupted the market and would have disrupted the post segment in PostNL. Managed integration of the 2 largest post networks was the only solution. This holds true for senders and recipients of post, it holds true for thousands of post deliverers, and it also holds true for the shareholders in PostNL. As we've explained previously, in terms of sustainable value creation, we have achieved this. Next, another question about Mail in the Netherlands from the foundation of legal protection for investors. Picnic experimented with collecting parcels for Sandd. Will you be continuing those? Sandd was not a significant operator in Parcels, and all activities we performed are taking place within our Parcels segment, not via Picnic. Those were the questions about Mail in the Netherlands and Sandd. Then Mr. Swinkels asked questions about sheltered workplaces. We've been discussing a shrinking market for years. Now there are other operators in market concerning regional services of postal service, and they use subsidized employees. Can PostNL use these subsidized employees as well? And how does it feel about the Participation Act, so the work Participation Act? As a large employer, PostNL does its best to support people with a distance from the job market. At present, we have made available over 500 jobs for people subject to the Participation Act. We do that in postal service, and we do this in Parcels. This is a successful arrangement in part because we cooperate closely with municipalities and the active sheltered workplaces in these municipalities. We think it's important to set up a work environment that accommodates everybody. The employees who work for us are in most cases covered by a sheltered workplace and are paid based on the CLA at these social workplaces, so sheltered workplaces. In addition, some employees at PostNL are supported through a wage cost subsidy because these employees are not able to earn their minimum wage entirely and dependently, and in some cases, it's a subsidized training program where we provide guidance. Another question concerns the claim of the -- the claim following the ACM, by [ Mr. Brookman and Mr. Brans ]. A question arrived concerning filing and claim following the unfairly imposed regulation on significant market power and resulting damages. The case is highly complex, and we're considering it carefully and investigating it. This means that we are looking in great detail to see what opportunities we have and how we could substantiate damages. We have quite a while to submit a possible claim, 5 years by law. When we have news, of course, we will do so. We will tell you any news we have. Next, there were questions about Parcels. First by the VEB. On the Capital Markets Day on May 7, PostNL assumed an average annual volume growth in Parcels of 14% from 2018 to 2022 (sic) [ 2020 ]. In the annual figures on 24 February, PostNL assumed the growth would be lower in 2020, i.e., between 7% and 9%. Is the expectation expressed on Capital Markets Day concerning 2018 to 2020 still realistic? Our expectation, when we disclosed the percentage averaging 14% was lower for -- than this 14% for 2020. The 7% to 9% is below that. And that's because, as we indicated previously, the market growth is tapering off and consumer confidence is declining as well. This is also partly because some segments have matured and are not growing as quickly anymore. The second reason for the market -- for the growth at PostNL being 7% to 9% is because some customers are using multi-vendorship for their parcel deliveries. This is expected to lead to a one-off change in PostNL, and after accommodating that effect, we expect our growth to align with the market. What continues is that the previously discussed measures for Parcels and our flexible network structure will continue enabling us to achieve a better margin and cash conversion even if volume growth is lower. The next question from the VEB. The issue of the parcel branch is lack of operating leverage. Strong volume growth does not sufficiently lead to cash flow. Why can't PostNL benefit from economies of scale in Parcels? And would an ongoing decline in the growth profile at the Parcels market help deal with these margins and this cash flow? What we have indicated clearly in our presentation is that we are focusing on a good balance between volume growth, earnings and cash conversion. In 2019, we already saw benefits from the steps taken. We saw an increase in underlying cash operating income, including in the Benelux parcel operations. The drivers were volume growth, offset in part by the negative price/mix effect. We saw an increase in cost because of the volume growth and implementation costs for expanding capacity. On the other hand, we saw improved efficiency. We saw an improvement in result, improved cash flow and a positive development of working capital. Overall, the initiatives that we communicated during the Capital Markets Day have been implemented, and we're busy increasing this profit margin even with lower volume growth, so that even if the volume growth is lower, we achieve higher margins and cash. At the Capital Markets Day, of course, we provided more detail about the measures that should lead us to a higher margin per package and should improve our efficiency. And I've mentioned some of them in my presentation. For example, peak pricing as well as efficiency measures as a consequence of having more parcels per household as well as an increased hit rate. What's also important is the small parcel sorting center, where we can arrange our network more flexibly and make it more efficient. Many of our standard parcels will be sorted at these sites, which can be automated more than in our current processes. In addition, this method will eliminate one step and that would benefit us cost-wise, and proposals for this innovative center will take place in '20 and '21 and are lower than the investments that would have been required. So we'll continue the regular expansion of our sorting centers. Another example of this flexible network structure is that as in the situation concerning corona, we're also able to raise our capacity, and that's what we demonstrated in the recent weeks by adding 40% capacity. Then the next question from the VEB was PostNL aims to strike a better balance between volume and value and margin and cash flow. Hasn't PostNL focused too much on growth in recent years rather than on value creation? First, we do not believe that we focused too much on growth. Overall, we see that the growth of the e-commerce markets is slowing since mid-2019 in part because our consumer confidence is declining and because some of the segments such as fashion, electronics are maturing, separate from the impact of corona. We also see cost rationalizations of web shops, so additional orders in one parcel and increased multi-vendorship. As PostNL, we're leveraging these trends. Can we -- we'll benefit more from additional growth in the future, and we're balancing volume growth, margin and cash better as well. The foundation of legal protection for investors asked 2 more questions about Parcels. The first question concerns whether we are able to achieve peak pricing. And what the procedure will be for heavy parcels? Peak pricing already figured in the contract negotiations from 2019. The effect of this and other measures for yield management will surface in our figures for 2020, and we expect this to benefit our price/mix. This is separate from the corona crisis. And we have a subsequent question about the effect of the higher OpEx costs on our operational leverage. We will present the full Q1 figures on May 4, and then we will also disclose exactly what has happened with costs for Parcels and costs for Mail in the Netherlands. We'll show the actual results for Q1, and we'll also revisit our commitment for our outlook. Next, the VEB asked questions about international. PostNL's expansion strategy beyond national borders didn't work well in the past. What has changed things in Belgium? And what returns does PostNL expect to achieve in Belgium? The expansion strategy mentioned was conducted in the years 2000 to 2005. During that period, many foreign operations were launched or networks were purchased. At that time, the idea was also that the postal market in Europe would be entirely liberalized. In 2015, we said that we would focus gradually on our Benelux activities. That led, first of all, to divesting our operations in England. In 2019, we've sold our German activities, and in 2020, we hope to wrap up the sale of our Italian activities. These were all domestic networks. That means, a network for post and parcels within Italy, a network for post and parcels within England and a network for post and parcels within Germany. Our Belgian operations figure integrally in our parcel offerings in the Netherlands and Belgium, and many of our customers in Belgium are Dutch web shops. It's a different system than the one we -- the ones we had in Germany, Italy and England. In Belgium, we note strong growth due to the heightened corona measures. In Belgium, we note that the growth is accelerating faster than in the Netherlands, and we're operating at maximum capacity there at this time. Being an integral part of Parcels in Belgium means that we're not only active in Parcels, but also in logistics. Belgium has its own pharma network, its own micro parcel network and so on. Those are important segments in Parcels. As for the margin in Belgium, to date, that's been part of our parcel margin, and we do not disclose that separately.

The VEB raised a couple of questions regarding pensions. I'll deal with those. Firstly, the scale of the unconditional pension payments at the end of the year. And whether it is the case that it is maximized at EUR 300 million? Now the unconditional pension payment was based on an agreement dating back several years. And the measurement point there was the third quarter of 2019, in particular, looking at the rate of cover and the discount rate. In other words, the interest rate which pension payments have to be made, that was fixed on that date, and that led to a payment of EUR 300 million at the end of 2020. It will be no more than that. So EUR 300 million obligation has -- can no longer change. That is what is going to be under unconditional pensions. Second question. Initiatives regarding the pension funds to see whether we can reduce payment because you've got the time at which you took stock of it, the measurement per time was in third quarter of 2019. That's why we're facing unusually low interest rates. And talks are underway with the pension fund. They're going very well. They're making good progress. We're looking to see whether there is another way in which we could implement the agreement. Our intention, how should I put it? Well, let's say, it can't get any worse. So we are very much looking to see an improvement. In other words, a lower payment to unconditional pensions. And I hope that when we come to talk about the first quarter figures, I can give you a really explicit description of what the agreement looks like. But talks are underway and a very constructive spirit. And as I say, I'm expecting to be able to give you more news on that very, very soon. Then questions, again, from the VEB regarding goodwill on the balance sheet, particularly more investments. And the question there is, goodwill is on Page 147 with only a couple of notes regarding it really, impairment, EUR 27 million. And the question is, what is it based on? Does it really look at 8 years’ worth of cash flow? Or does it look at terminal value, et cetera? Well, this is all part of regulation and testing. At the end of 2018, we carried out an assessment of the value of investment in Mail in the Netherlands. And on the condensed balance sheet, you could see that we did it again at the end of 2019. And this takes account of the cash flow arising from big cash generating units, so as to say, Parcels and Mail in the Netherlands. Then we take the cash value of the first 8 years in the forecast in order then to add the terminal value, cash value to that. We were looking at that point at a terminal decline rate in Mail in the Netherlands and a growth in Parcels. The effect of the impairment test led to a devaluation of about EUR 400 million. I've also included the impact of discontinued operations arising from announced transactions, which means that regarding -- well, compared to 2018, we're also looking at more of a volume decrease in Mail in the Netherlands than was expected in 2019. On the other hand, we've had the positive impact of the VAT agreements, which has led, therefore, to a simplified down-writing of EUR 409 million. Now impairment scenarios are sketched out every year. We talked to the auditors. It came to the light. In fact, it's a key audit matter in the Ernst & Young report. And on Page 195 and further, you can see a little bit more detail on how the impairment testing is carried out.

Then I have -- there's a question about the relationship with investors. The VEB asked a question. PostNL mentions that it's an extensive consultation with investors on Page 18 of the annual report. What feedback did PostNL receive? We're in continuous constructive dialogue with our shareholders. We do this after every quarterly report. And during these discussions, many topics are covered. As for what surfaced after Q4, one constantly recurring topic is reconfirming the strategy. So focusing on growth in Parcels and realizing constant cash flow for Mail in the Netherlands; consolidation with Sandd; and how we will achieve the synergies, substantiate our plans; our approach in Parcels to improve leverage and our cash flow conversion; how we aim to transition from 2020 to 2021, as Pim explained in his presentation; dividend policy; and when can we expect a dividend; as I understand, what's the outlook for 2020 in cash and what will -- what lies ahead for 2021 in cash terms.

Right. The VEB also asked a couple of questions regarding Herna Verhagen's other activities. For example, her nomination at NATO and the extent to which the Supervisory Board thinks this latest appointment is the interest of PostNL? Well, the first point is that the NATO position is a temporary one, going from June to December this year, and it only takes up a limited amount of Mrs. Verhagen's time. Does the Board think that Herna is able to carry these other activities out alongside her work in PostNL? The answer is, yes. And we are very proud that Herna was invited to take up a position at NATO. In addition to the social importance of this position, it's also very vital for PostNL to be well connected to other networks and trends in society as a whole. Furthermore, we are convinced that PostNL is Verhagen's priority #1.

That takes me to the questions asked by the VBDO, the association for investors and sustainable development. [ Inaudible remarks from the floor ].

We're almost at the end of the questions we received in writing. I understand that you're very eager to ask questions, I'll get to you in a moment. [ Speaker on the floor remains inaudible. Interpreter apologizes ]. We're almost there.

Now working conditions. The VBDO association of investors for sustainability development asked, first of all, in the annual report for 2019 and the procurement policy reflects a risk assessment policy towards employers concerning human rights, the companies that use the delivery services of PostNL greatly impact working conditions worldwide. Is PostNL willing to investigate this with some of the customers? And based on these results, is PostNL willing with several other post and parcel deliverers to set certain standards for working conditions among its customers? We realize that customers may have an important impact on people's working conditions. And at PostNL, we care about human rights throughout the chain. That's why through our stakeholder, we'll introduce some and assess the most important risks in this field in 2020 and how we can determine follow-up steps with these chain partners as well as our role at PostNL there. The last part is important to identify who counts as a customer as for our recipients. Based on the Universal Postal Service, PostNL is required to deliver to each customer in the Netherlands. The next question of the VBDO. VBDO congratulates PostNL on issuing the first green bond for 2019 to continue making operations more sustainable and retaining its high A- score in the CDP benchmark. As for climate adaptation, PostNL has examined the physical consequences of climate change for its own organization. Climate change might have a serious impact on the supply and transport of parcels and letters. Prices could fluctuate. PostNL is willing to complement this in the future to include the exposure of customers to climate change. Climate change is a topic that we're increasingly discussing with customers and partners and more sustainable chain figures prominently in these discussions. We discussed both risks and opportunities, both for us and for our customers and partners. Together with our customers and partners, we regularly discuss exposure to the physical consequences of climate change. In 2020, we will speak with the selection of our customers and partners about how we can learn better and more from each other. A broadly-based assessment is certainly possible in this context. The gender pay gap. VBDO asks [Technical Difficulty] 2019 to 2020, we agreed to explore equal pay for equal work for men and women in PostNL. Based on this joint analysis, we conclude that within PostNL, we provide the same pay for the same work to men and women in PostNL. Any differences in payment may be explained based on objective criteria, such as years of service. We expected this outcome since PostNL has a system of job assessment and salary -- fixed salary grades, which guarantee objective payment skills regardless of gender. So jointly, the unions and PostNL decided that there was no cause for additional investigation of payment for men and women, and we will not report on this separately.

Thank you very much. And then the final question before I open the floor. This is also from the VEB. Now on Page 73 of the annual report, you said the Management and the Supervisory Board have discussed the share price many times in 2019. And the share price trend is a topic that we discuss at regular intervals. And if there's ever anything, any conclusions to be drawn or statements to be made, then we always do so, of course. We take the view ourselves that the share price is indeed disappointing, particularly in the light of the major steps that we've implemented in our strategy in recent years. We've been creating a good position and profits for PostNL. We've worked on parcels accretive. We've solved the pension problem. We've decided to sell our German and Italian activities. And we've taken Sandd over. I am sorry to say that is not reflected in the share price, but of course, that's a matter for the market. And now I'll open the floor for any questions from the room.

My name is Robert Vreeken. I'm from We Connect You, Public Affairs and Investor Relations. Now I provide advice services to government and business, and I can see that we are in a situation where every cloud has a silver lining. Mrs. Verhagen, thank you very much for your excellent presentation. This is now the time to sow. And you have been sowing for many years in very, very tough circumstances. And this is rather now the point at which we can reap. I was asking about cybercrime, for example. You gave a good answer to that question. And now we've been asking ourselves what would happen if we really got involved with a serious cybercrime. And PostNL would be one of the few companies in the Netherlands who could survive it. I can see also with Arno Van Bijnen and here in the room and so on, I'm welcomed very, very warmly. And you're handling the emergency situation extremely well. Your response to the emergency legislation was not to prevent shareholders coming into the room, but to make sure we could be here very safely. As many as 10 shareholders can sit in the room. What's very striking is that here in the Netherlands and in China, we haven't achieved our climate targets for 2030. We've already achieved our targets for 2050 regarding the climate. There is no pollution anymore. No CO2 is being generated. No nitrogen is being produced. So it's very safe here in the Netherlands. So now it's really the time to build on what we've achieved. I can see you chuckling, but no, I don't hear the Dutch pioneering spirit. Now imagine -- now you've been working at ING, that's a very tough job. Now you're working at NATO. That's a very important job, too, because there is all kinds of logistical problems in NATO, and all -- they all fit together. It's a huge task. As a member, well, and it is a shame that VEB is not here because it means we can't have a dialogue with the VEB themselves, which is part of the members. Regarding the share price, it's important to have even better shareholder communication to make sure that the share price can rise. I see signs of tunnel vision, both in the government sector and in the business sector. Right back in February, we knew how bad things were going to get and nothing was done. And that means that next week, a little country like the Netherlands where there's 20 million people living here, we will overtake China with more than 330 dead. Now a while ago, I was at ING, this is relevant because we went through every possible scenario that could happen and nothing was done. And now 20 years after that, we've got a global meltdown, thousands of billions of harm being done and to no avail. And I would be very happy to share the know-how I have built up with people in the public and private sectors. So I can see you suffer from tunnel vision. I can see your motto literally means -- leaves the space, but also this gives people a free hand. I'd say, like when you go to the supermarket, you've got to deal with keeping social distancing and so on and the -- you walk past people 1 foot or 2 away, and people in the supermarket think they're doing very well. In fact, they're not.

Mr. Vreeken, this is a very entertaining, a very intensive speech. But have you got a question?

Yes, I've got a question. How are you going to work with the public and private sectors in order to keep the Netherlands safe? Because you are a logistical company. You can -- you're good at doing it, whereas advertising and supermarkets are not succeeding in doing it.

Next?

That was one question. Yes, indeed. Second question, ING. Ralph Hamers wasn't earning anything like enough and like [indiscernible], he's gone off to a new position where he'll be earning EUR 5 million or EUR 10 million. This is a great shame for the Netherlands. And a real problem there is no discharge was granted last year. So it's important to make sure that you do not suffer from these very strange circumstances that currently prevail in ING. My question is, how are you going to do it? Another question is sick leave. And it will be very nice if staff who are willing could communicate their post code so that we know who has got the coronavirus because the RIVM, the public health authority, I can see that 30% of people with virus are actually working in the health sector. It is unimaginable that such a percentage could possibly be infected. And that is really bad employee/employer practice, and you are being very good employers here. Now we got the Dutch way of proceeding in PostNL. I'm very pleased with that, and I'll be more than happy to share my communication and lobbying skills with you and not network skills with you because I can see that all the effort I've put into the public and private sectors in recent years, I have got a real sense of what's happening, much more than most people have. Just for example, you were very proud of your sustainability in Ameland. I suggest, Ameland is a remote island, that's very easy. But let's go to the center of Amsterdam. Now you're in the center of Amsterdam, and you've got electric bikes and delivery bicycles and so on, 15 kilometers, and is busy. And you're managing to make bicycle delivery safe as well. I'd like to talk about that with you some more. Yes, I've got 3 questions. I've written down now. Well, I'm delighted that.

Can I ask you to come to the end of your contribution?

Yes, certainly. Now self-employed people are in real difficulties now under the trade unions and the Dutch Labor Party, Ad Melkert will be coming along with all his international experience. I think we need to look much more at individual employees because there is 1 million people suffering at the moment. We need to see what we can do. I think, perhaps, all self-employed people need to find their way back into permanent employment. That goes for all companies and also for all public sector organizations. So that such people can actually have a steady income rather than scraping and buying EUR 1,000 a month. Those are my questions.

Thank you very much, Mr. Vreeken, and thank you also for your kind words to Herna Verhagen and your kind words regarding PostNL.

I've got a couple for you, Mr. Nooitgedagt, as well. I know you're not fishing for compliments, but I'm sure, I'd like to say it. You've got a magnificent CV. You could be working in the Media of Telegraaf. You've got a good network. And in February, last Saturday in fact it was, there is a nice article in the FOX Trend newspaper, saying that the Netherlands was sleeping into the crisis in February. That's costing us dozens and dozens of billions of euros. And I think you could bring your influence to bear to sort things out a bit better.

Well, thank you. I don't know what I've done to deserve your flattering remarks, but thank you very much. Please sit down, and we'll go through your questions. Herna, would you like to start?

Yes, improved cooperation with the public and private sectors in order to buy private holders for short call, the health and safety regulations. Well, here are some. Regarding PostNL, we're doing this in a number of ways. We're working together very closely with the government in order to get a clear idea of what these measures actually mean and what might be in store for us. But we also, of course, want to talk with the government to see how we could do things in practice, how could we do it? What does it all actually mean? That's important, I think. Now our ideas, but we've adapted our processes, and we've got this 1.5 meter social distancing. And we are sharing that idea with the employees' organization via the CNV, so they can learn from our experience. Regarding discharge at ING, now that, of course, is on the agenda for the next General Meeting of Shareholders at ING. And I've been on this Advisory Board since October. All I can do is do my job, and then it's up to the shareholders to decide what they think of it. Sick leave and postcodes for people who are sick. Well, I think there are real privacy problems there. But aside from that, in PostNL, I think that exactly as you said, we don't actually know who has already had coronavirus in the Netherlands and who hasn't. And that's as true of PostNL staff as it is with anyone else. We're keeping a very close eye on sick leave, and we're very strict on this. We said that anyone who feels ill, has got a sniffle or has got something a bit more than just a cold, someone coughing, feverish, temperature, must stay home; or any person who is in a vulnerable position, if you can't work safely, then you may stay at home. People with breathing difficulties must also stay at home. So we are having a generous interpretation of entitlement to sick leave. And we're trying to avoid a situation where people can infect each other. Self-employed people. Now in 2015 and '16, PostNL decided that most of the self-employed people working for us would be taken on into full-time -- into permanent positions. I think we've got 260 self-employed still working for us, but we've mostly got them into PostNL staff or the staff and our delivery partners, which means they're working under a collective bargaining agreement. So that's a major progress that's been made in that direction.

Okay. Thank you very much, Herna. Looking around the room to see if there are any other questions. Yes?

I'm [indiscernible]. I'm a bit different from the previous person who asked questions. I am a retired professor of Neuroscience, and I've always been fascinated since I was a 7-year old in what's now called PostNL, at that time, it was called the PTT. And we have a special manual where we considered what happened between 1876 and 1899. We compared 1876 with 1899. In 1899, 20x as much post was being delivered as in 1876. And it was a state-owned company at the time, it was called the Postal Services, Postdienst, meaning postal services. The volume was increased by 20x. One of the main reasons for this increase was that the postal service started delivering all newspapers. So I thought, wait a minute, delivering newspapers 3 times a day, somebody comes to warehouse twice the newspaper and once the mail, and I thought couldn't we combine all of that. I admit that, that was over a century ago, but might that work because having one of your people deliver everything that's ordinarily delivered in three times delivered all at once. So could newspaper deliveries merge with postal delivery? I think that's probably very easy to answer.

Thank you for your question. This period does fascinate me as well. So if you publish your study, I'll look forward to reading it.

In the past 10 years, we've often considered combining postal delivery with newspaper delivery. The challenge is that postal delivery is a 24-hour product, that means that all post place in the mailboxes in the evening, we have to sort the mail in the evening and then deliver the post from location in the morning. At 11, those bags with post are readied and then the postal deliverers deliver their post in the neighborhood. The newspaper companies with newspapers to be delivered before 7 or 7:30 in the morning, and that's the challenge. That's why it's not working. Since the postal operations are a 24-hour task, we need to spend part of that morning preparing the post for delivery from 11 in the morning. But by then, you should have had your newspaper for a few hours. So that's why we haven't been able to combine those yet.

What about in the afternoon, says the speaker?

Well, there are door-to-door leaflets, and there's the NRC daily, which is delivered in the afternoon. As we always say, we think that, that combination might work but then it has to follow our procedures. That's what matters us. But most newspapers or morning papers, and I understand that people want to receive their paper to read over breakfast in the morning.

Okay. One more question.

Yes. I mentioned this earlier, and I'd just like to follow-on from what the previous gentleman was saying. It would be very nice if PostNL could take a leadership role in coordinating all the various vans that drive up and down our roads and spread deliveries out over -- throughout the week. Not everything needs to be delivered overnight or the next day, some deliveries can wait. You could have 2 different postal tariffs. And that would be a way of, how should I put it, of restricting the number of vehicle movements. You could really fine-tune things in logistics, saving a great deal of money and reducing CO2 and nitrogen emissions once things get up and running again. So I think it would be good to look at that idea and see if you can bring into location with your delivery vans.

Well, I'll certainly take your idea on board. And I think a very nice thing in PostNL is everyone's got opinions on PostNL. Everyone's got something to say. It's a very interesting company for that reason, so thank you very much for your suggestion.

Okay. Shall we say then there are no further questions on this agenda item? There is a management report 2A and 2B. We've dealt with those now fully. And now I'd like to move on to remuneration, Item 3 on the agenda. And here we can be talking about the remuneration report and the Board of Management and Supervisory Board's remuneration policy. Now the first point is Agenda Item 3A, remuneration policy. We've got a remuneration report. In the light of the guidelines on shareholders' rights in Dutch legislation, in accordance with that, we will be presenting the report to you for nonbinding vote. You can find this regarding year '19 in Section 15 of the management report. Now in order to run you through this report, I'd like to hand over to Jacques Wallage. He's Chairman of the Remuneration Committee. And Jacques, you will also be dealing with all the written questions and the questions that are asked in the room as well. I hope you can hear me, Jacques. Are you there?

Yes, Chairman, we have lost our telephone connection with Mr. Wallage for a moment. We are busy restoring it.

I was worried that might happen, yes. Who's phoning who? Mr. Wallage should be on the phone again now.

We're having trouble getting through to Mr. Wallage on his mobile phone. We're still trying to make contact.

One thing I can do while we've got time then is regarding voting. Before we proceed to the vote, I can inform you that we can see, there is 122 shareholders at the meeting. There's only 2 of you in the room, but there is 122 who are entitled to vote to a total of 130 million-plus votes, which means that is 26.4% of all the shares are represented. This is at 99.5% of the capital represented is represented by proxy votes communicated in advance. Now -- we would like now to proceed to the vote, but we can't do so at this stage. Yes, Mr. Wallage, can you hear us now?

Yes, yes.

Excellent. I thought we had a bit of a problem, but now we have -- you're back with us again, that's good. Now would you like to -- or I've just informed the meeting that you're going to be turning -- talking about the remuneration report and that you'll be dealing with the questions submitted in writing and any questions from the room as well.

I'll start off with Slide 3. As you heard, the remuneration report deals with 2019 and will then be put for the shareholders for a nonbinding vote. After that, we'll talk about the remuneration policy for the 2 Boards. Both of these documents represent you for approval by vote. You will find the remuneration report of 2019 on Page 99 to 109 of the annual report, that's Section 15. Remuneration over 2019 is based on the current remuneration policy as established in 2013. In the light of what I've just said, there is a European Commission guidelines underway regarding remuneration report. The final regulations will not yet come through, but we understand what is the spirit of them, and we are therefore aiming to take that on board. This means that the remuneration report takes a different form from the one it's had in previous years. Regarding actual remuneration of 2019, you can see that on pages 103 and 104 of the Annual Report. Here, you can see that the total remuneration is slightly higher in 2019 than in 2018. This is particularly because of a better achievement of the short-term objectives in 2019 compared with 2018. Here, I'd just like to point out that the remuneration of the Board of Management has no connection at all to the Sandd acquisition. I've got no questions in writing at this point. Any questions from the floor.

Any questions?

What is Mrs. Verhagen's current salary? The total.

I couldn't tell you off the top of my head. You can find that on Page 103 of the annual report.

Yes, but I didn't receive a physical copy of the annual report.

I can answer the question for you. The total remuneration is EUR 1,105,116. And Mrs. Verhagen went from a EUR 1.4 million to EUR 1 million in 2016. And I guess the earnings are about EUR 140 million. So is that correct? Well, you should have all of those data because...

No, I didn't receive the data because I don't have an Annual Report. I was not presented with a physical copy of the Annual Report. Mr. Berendsen probably missed it. So the net earnings, are they EUR 140 million?

Well, if we're talking about the underlying cash operating income, that was EUR 176 million.

Mrs. Verhagen, this is not about her personally, but it's the system in the Netherlands. She now serves on the ING Supervisory Board, and Ralph Hamers achieved about EUR 5 billion last year. And his salary, when the earnings were about 20x that much, his salary was only EUR 2 million. So something is going wrong. Either Mr. Hamers is not making enough or Mrs. Verhagen is receiving too much money, but it's important for people's salaries to be balanced. And my impression is that Mr. Hamers is not being paid enough, but I think that this point merits consideration for this country.

I'll talk about the composition of the salaries in due course. Perhaps, that would be a good point. I wish I can respond to your question. Okay, right. Jacques will continue.

Okay, this was on to Slide 4. Just a minute, just a minute.

A question of -- we could have a vote, haven't we?

Yes, Ewout will now run us through the voting process.

Yes. Thank you. This is a different way of voting from what we've had in the past. We won't be using the handsets anymore. It's all online. I understand the people in the room have all already given your votes. So talking to the people following us online, you're logged onto the ABN AMRO system, and you can currently vote on all agenda items. You can vote in favor or against or you can abstain. You can change your vote if you wish to at any moment before the Chairman closes voting. And it's your last vote that counts. Now voting will actually be open until the very end of the meeting. So you can vote on any agenda item until the end of the meeting. Once the voting is closed at the end of the meeting, the voting results will appear on the screen for each agenda item. I'll see the number of votes cast, both during the meeting and online and written -- by written proxy. Now I'll return the floor to the Chairman.

Yes. Thank you, Ewout. Well, we can now proceed to vote on the remuneration report 2019. Please vote as you wish. [Voting]

And we'll see the outcome in due course. Okay. We're now going on then to remuneration policy for the Board of Management. Now the current Board of Management remuneration policy was established in 2013, and there's now a new policy being presented to you for adoption. This is in line with the new legal requirements in the light of Dutch legislation on shareholders' rights. The Central Works Council has -- is entitled to express an opinion regarding this policy and is spoken in favor of it. The new policy together with the opinion provided by the Central Works Council and the decision by the company can be found in the annotated agenda. And in order to run you through the new Board of Management remuneration policy, I'll give the floor to Jacques, once again, because he is Chairman of the Remuneration Committee.

Okay. Let's take it to Slide 7 then. As we said earlier, we're going to be talking about the remuneration policy from 2020. Now it's one of the tasks of the Supervisory Board to establish this kind of policy. It's in light of new EU legislation and some adaptations to the Board of Management remuneration policy need to be made in the light of that. So we -- the new policy is based on the existing policy. What we've done here is we've updated our guiding principles. I'll run through them. Firstly, alignment is the first principle. The remuneration policy must be in the interest of all stakeholders, both short and long-term objectives, bearing in mind, of course, the context and environment in which we operate. In addition, we keep a close eye on market trends and make comparisons with the peer group. The outcome of this is reflected in our remuneration policy. Second principle is transparency. We think it's important to make sure that our policy is open and adaptable. Third principle, compliant. We have the highest corporate governance standards, and we are fully in line with legislation. Principle four, it must be simple. The policy and operation of it must be easy and comprehensible for all stakeholders. And final principle, sustainable. The policy is in line with PostNL's sustainability policy and socially responsible business practice. Now the current 3 points are part of the current remuneration policy: one, base pay, which is supposed to provide members of the Board of Management with a certain predictable income as they do their work for PostNL. Secondly, it's the variable income component. This is an integral part of the remuneration policy, and it contains short- and long-term indicators known as STIs and LTIs. The short-term variable pay, it reflects the operational performances and the long-term looks at the value-creation strategy. Here, we look at the interest of all the stakeholders. The long-term variable component looks at ways in which value is being created and makes sure that the Board of Management's interests are in line with those of shareholders. We do this by granting shares to the Board of Management. Then the third component part is pensions and other benefits. Those are in line with those of PostNL staff. Now what I'd like to do now is go through some of the main amendments. Slide 8 here. Here, for the base salary, we can see that it might be increased. It will be increased in the light of the collective bargaining agreement with PostNL. Now we got the new policy which is quantified. We have a reference to the 25th percentile of the peer group. This is in order to achieve greater transparency. The same applies to the long-term indicators, both the STI and the LTI reflect performance targets, and the assessment of the results that have been adaptive. You can see the details on that on pages 108 and 109 of the 2019 report. For the LTI, we've also got an end date inserted. In other words, the LTI is only achieved at the end of the performance period, and that's when the payment is made. We've also looked at taking new items, which could be part of the current LTI plans. This is to make sure that the Board of Management members are fully in line with the interest of shareholders. Finally, a couple of further adaptations. We are introducing, partly because of our stakeholder interest, we're introducing share ownership guidelines to members of the management board. This means that 75% of the base pay is made to them compulsory in PostNL shares. This means that they can build up a shareholding over a 7-year period. This emphasizes the Board of Management's confidence in the strategy and future corporate performance. Further, we have discretionary authorizations in certain cases for the management board -- for the Supervisory Board to reflect special circumstances in the light of the civil code. Now I'd like to go through 6 questions on this topic. Firstly, Mr. Brookman asked a question. Why is the Management Board's fixed pay section not being reduced and increasing the variable part, which would reflect the shareholders, the share price? I think this would be more comprehensible to the shareholders who will understand what's happening. Well, my answer to this is, as I said a moment ago, alignment is one of our guiding principles in remuneration policy, and that it is one of our guiding principles. That means then that all the shareholders' interests have to be taken into account and that includes shareholders, obviously. You can see this very clearly reflected in the long-term variable remuneration. This is paid out 100% in shares, and the proposed new remuneration policy continues this. A change in share values, therefore, does have a real effect on the remuneration of the board members. Furthermore, partly on the request of shareholders, in fact, as I said earlier, we are setting up share ownership guidelines. In this way, all members of the Management Board commit themselves to have at least a certain holding of personal shares and to keep that holding. And a change in the share price, therefore, certainly has an impact on the members of the Board of Management. That's question one. Question 2 from the VEB, shareholders' association. Regarding the criteria regarding staff and customers, quality and CO2, very short-term bonus has been made for 2019 because the thresholds will not be met. They have been achieved, however, for the financial criteria on Page 104. How can that be reconciled with the disappointing share price trend? Our investors are not critical enough regarding financial criteria. Answer, well, all I can say really is that we have set ourselves challenging but realistic targets for the Board of Management. And that applies to the criteria for variable pay, and regarding criteria, if the criteria are met, then the pay is adapted accordingly. So we are adapting the policy to reflect that. Second question was also from the VEB and from [ Mr. Brown ]. In light of the many years of value destruction, the disastrous share price trends and the many year trend lasting for -- regarding our shareholders, we can see there is no really convincing strategy to create economic value. Might it not make more sense to not grant any bonuses in future? Mr. Brown says, we can see that the Board of Management and management generally are not reflecting -- not responding satisfactorily to the collapse in the share price, and we can't see this reflected in bonuses that are granted to them. And also any bonuses arriving from the Sandd acquisition should not be granted. My answer to this is, we have -- the variable remuneration is part of our remuneration system. It's not an extra, it's part of the policy that we have all agreed on together. The remuneration policy of the management board is made up of these 3 remuneration components. The variable income is an integrated part of it on the basis of the framework that I outlined earlier. You can see what is the results of this policy in the annual report. Your proposals are essentially to have an ad hoc decision on something which is actually an integral part of the remuneration policy. And the remuneration policy has to fit into the frameworks, which have already been set up in advance. You set objectives and see whether they have been met or not. That is an agreement which has been made regarding our remuneration policy. I'd also point out that the remuneration of the Board of Management is not in any way connected to the Sandd takeover. Regarding the Supervisory Board, I can be very brief here. The remuneration policy of the Supervisory Board does not have any variable component affecting company performance. Another question from VEB. Why did PostNL not decide to bring Verhagen's leaving bonus inclined with the code, which is maximum 1 year's base salary? The answer is, we do respect that. We entered into agreements with the CEO in 2010, and we say when you make an agreement, we stick to it. Next question from the VEB. Why doesn't your remuneration policy not set out any targets regarding the potential of PostNL to generate more value? For example, improving return on investment. The answer is, well, if we look at anything other than earnings attributable to shareholders as a share member, well, we have actually created the possibility for value creation. It is an integral part of our remuneration policy. This is the basis of the dividend, which shareholders expect to see. In addition, we have the LTI performance measures, cash generation parcels, cash generation for Mail in NL, and these are particular drivers producing value in the company. Those are our written questions. Are there any questions in the -- from the room?

Yes, I can see that no one in the room is asking a question. There is a question. Okay, go ahead, please. Nice, brief question, please.

It would be a wonderful challenge. I hear a lot of shareholders complaining that the share prices are too low. Suppose that Mrs. Verhagen manages to raise the share prices as the shareholders would like, it would be a good idea to give her a magnificent bonus, and perhaps, that could be incorporated because they've been complaining about the share prices for years and years, and this might be the perfect moment for that gesture. What do you think of that, Mr. Wallage?

Well, as I said earlier, our remuneration policy has a number of connections, and members of the Board of Management are rewarded for positive trends in our share price, the real share value. And if things don't go well, it has an impact on the long-term remuneration, the long-term variable in their remuneration. So there is a connection here. There is a number of other targets as well, of course, financial and nonfinancial targets, assessing how will they do their job. So I think that, that is dealt with very satisfactory.

Well, I don't want to lapse into repetition, but year after year, I hear the shareholders complaining. I am a very happy shareholder. But if that unhappiness becomes so embedded, perhaps, you would want to revise the strategy and use certain instruments so that all of the Netherlands starts purchasing PostNL shares.

Yes, we have a very well-balanced remuneration package. And I think we'd have to achieve your ideas, and if -- we'll take your comments on board.

Well, Jacques, if you agree, we'd like to proceed to the vote now. I think I mentioned our people at home on pressing buttons to vote. I imagine that's going to be happening. Ewout's nodding. [Voting]

So we are deemed to have voted on remuneration policy for the Management Board. Now Jacques, we can go on to the remuneration policy for the Supervisory Board. Perhaps you could go through this a little bit quicker, it's rather less interesting as well, I think.

Yes, yes, it's quite so. The current remuneration policy for the Supervisory Board was adopted in 2005. We're now presenting a new policy to you. It was the -- we consulted the Central Works Council on it and so on. They came up with a positive opinion. And boiling it down, essentially, we can see the new proposal for the 2020 and following years on these Supervisory Board's remuneration here. So this is why the new policy is being put forward in order to reflect new legislation, et cetera. Now as you can see, most of the guiding principles is -- are in line with those of the Board of Management, alignment, independency, transparent, compliant, simple. Those are the guiding principles for the remuneration policy for the Supervisory Board. Now the PostNL results do not have an impact on the Supervisory Board's remuneration. We decided to keep things as they are without any flexible component and give out any payment in shares. So think of the kind of role they play here. This last factor is reflected by looking at the same peer group as we look at for the Management Board remuneration policy, and we fit it into the 25th percentile here. As you see, the main change here is the way in which the committees are remunerated. So rather than a payment per meeting, they will get an annual fee for serving on a committee. And again, we have a distinction between the Chairman and the members of the committee. The main reason for that is that the -- it makes the remuneration more transparent, and it's also more in line with market practices. There is no cost impact of this change. No questions of this were submitted in writing, Chairman.

Okay. Any questions from the floor? No? Hard for me to see because I got the sun in my eyes, but no one asks for it. So let us move on now. We can now move on to the vote. Please vote. We assume you are voting at home. [Voting]

Okay. And now, Jacques, thank you very much for joining us. And I'd now like to go to adopting the financial statements for 2019. You can find that on Pages 116 and following of the annual report. Ernst & Young Accountants LLP have approved, if you can see their statement as well. A number of questions, several questions, I think, have already been dealt with under agenda Item 2. Are there any further questions? I'm looking to my left and right. Have we -- I think we dealt with all the questions, haven't we? Any further questions? Any questions from the floor regarding the financial statements? No. Okay. In that case, I will say that the annual report and financial statements have been fully discussed. It is now time for you to cast your vote by pressing the button of your choice. [Voting]

Thank you very much. This brings us over then to dividend policy. The dividend policy is what we'll do with first. The PostNL dividend policy. The Board of Management has decided to adapt the PostNL dividend policy, and this decision by the -- was approved by the Supervisory Board in February in keeping with the Dutch Corporate Governance Code. These guidelines should be addressed as a separate agenda item and justified at this meeting. The highlights of the amended dividend policy are that dividend shall be distributed subject to the condition that PostNL is correctly financed within the adopted financial framework. The idea is to distribute a dividend that largely aligns with operating results. A payout ratio of approximately 70% to 90% of the adjusted total result and in cash or shares at the discretion of a shareholder, and an interim dividend of approximately 1/3 of the dividend in the previous year. This is your opportunity to ask any questions. And we have received a few questions in advance. I think you'll take those Pim? Both the VEB and Mr. [ Brookman ] asked questions about this dividend policy. The questions are about deviating from the dividend policy in terms of the leverage policy to distribute a dividend, after all the reason why we're not waiving stock dividends or starting a share buyback program? And what is the highest risk of future payments after the announcement that 12 to 24 months after closing the deal with Sandd, we can resume paying a dividend to honor our announcement that within 12 to 24 months after closing the deal with Sandd, we pay our dividend. It seems obvious to me that this depends on the duration impact of the coronavirus.

At present, we have no cause to deviate from this announcement. But as explicitly reported in today's trading update, the duration impact of COVID-19 remains uncertain, and that could be the greatest risk. As announced previously, the implementation of integrating Sandd within the PostNL network has proceeded admirably to date and is well on track for the business case that we shared with the market. Of course, we also need to consider general corporate risks regarding revenue and global economic goings-on. Deviating from our dividend policy and a payout with a higher leverage ratio is not an option because we want to pursue consistency from parent's policy in accordance with our financial framework. We care about having a solid financial balance sheet. And we don't want the debt to exceed the EBITDA ratio by 2. That concerns sustainable managing the company. As for the dividend, we are offering shareholders the option between a cash or stock dividend. This way, shareholders can decide whether they prefer to receive cash or shares. As for repurchasing shares to avert dilution in Q4 2018, I previously answered a similar question. Prioritization to use cash resources is very clear to us. We invest primarily in the firm itself to achieve sustainable value creation. Second, to pay dividend to our shareholders and keeping with the dividend policy, we just discussed. And if cash creation after 2020, given the volume increase in parcels after 2020 gives cause, at that point, we will consider whether there is room to -- weather dilution as a consequence of the dividend policy could be offset by repurchasing our own shares. That's the ranking in prioritization at this point.

And those were the questions I received on this point. Thank you very much, Pim. Are there any other questions about the dividend policy among those in the room? No? Thank you. Then I see that we've given this item sufficient consideration. Now onto 5b, profit appropriation. Assuming that you have adopted the financial statements for 2019 because I have to see what the outcome on the vote is, and keeping with the PostNL's articles of association, we propose paying a dividend from the earnings for the 2019 financial year to those holding ordinary shares equaling EUR 0.08, which is the same as the interim dividend paid by PostNL in August 2019. So no final dividend would be paid. There are no questions about this either.

Mr. Chairman, I missed one question. I just caught that, which, if I may, I'll answer very quickly. There was a question from the foundation for legal protection of investors concerning dividend, and it's as follows: could you mitigate the damage by indicating the percentage of likelihood that a dividend will be paid out next year? As indicated previously, 12 to 24 months after the consolidation is what we indicated to the time frame for getting the leverage ratio back under two, that has not changed. Given our present perspective of their integration, the greatest risk of paying within the 12 to 24 month ratio is the depth and extent of the COVID-19 crisis. We're doing everything as stated in our trading update to ensure that cash flow creation leverage ratio improve as quickly as possible so that we can resume payment of dividend.

Thank you. Are there any questions about the profit appropriation in -- among the people in the room here? No? Then I'd like to remind you once again to vote on the profit appropriation by pressing the button of your choice. [Voting]

That takes us to item 6 on the agenda, discharge. So 6A is granting discharge to the members of the Board of Management. The general meeting of shareholders is requested to grant the members of the PostNL Board of Management discharge for the duties they performed as evidenced in the Board report and the financial statements for financial year 2019 or otherwise disclosed to the general meeting of shareholders. I don't believe any questions were asked about this in advance. Are there any more questions in the room? No? Thank you. Then once again, let me remind you that you can cast your vote on the decision to grant discharge to the members of the PostNL Board of Management by pressing the button of your choice. Now on to 6B, which is granting discharge to the Supervisory Board members and following the previous agenda item, the general meeting of shareholders has also asked to grant discharge to the Supervisory Board members of PostNL for the duties they performed as evidenced by the Board report and financial statements for financial year 2019 or otherwise disclosed to the general meeting of shareholders. No questions were asked about this in advance. Are there any questions from the people in the room? No? Thank you. Then I'd like to remind you to vote on the proposal to grant discharge to the Supervisory Board member by pressing the button of your choice. [Voting]

Now onto 7, amendment of the PostNL N.V. articles of associations. It is proposed that the PostNL articles of association be amended. This amendment relates to amendments in the legislation regulations and other textual amendments and clarifications. This amendment of the articles association does not envisage any material amendments to the PostNL and the articles of association. The proposed amendments are included in the -- with an explanation in the annex to the agenda and were made available at the office of PostNL. The proposal to amend the articles of association also includes some -- authorizing any member of the Board of Management as well as searching your civil law notaries at Stibbe N.V. to sign the deed amending the articles of association and to do anything else that according to the authorized individual is necessary or useful. There is a question about this. I can ask that one. That's a question from Mr. [indiscernible]. At Article 38 in the new articles of associations, it says that the general meeting of shareholders will take place in Amsterdam, The Hague, Hoofddorp, Haarlemmermeer. And basically, we do always conduct this meeting at The Hague. By including additional places, we increase our flexibility if we need to conduct a meeting at a place other than in the Hague, Mr. Chairman. Thank you. Are there any other questions that you may have? No? Okay. Then I would like to ask you once again to cast your vote on the proposal to amend the PostNL N.V. articles of association by pressing the button of your choice. That takes us to the -- let's say, we've had the amendment of the articles of association. I've covered that one. Now the Supervisory Board. Item 8 on the agenda. In keeping with 23.1 in the articles of association, the Supervisory Board comprises at least 3 members. The Supervisory Board determines the number of members. And the desired size at present is set at 7. Keeping with the schedule of rotation adopted by the Supervisory Board, Jacques Wallage and Frank Rovekamp will step down at the close of this annual general meeting of shareholders. They are not eligible for reappointment. The Supervisory Board deeply regrets having to bid farewell to Jacques and Frank, and we'll say more about this later on. At the same time, we're happy that Ad Melkert and Jeroen Hoencamp may be nominated as their successors. Now 8b, opportunity for recommendations by the general meeting for appointment of a Supervisory Board member that general meeting of shareholders may recommend persons to the Supervisory Board for appointment of Supervisory Board members in keeping with the applicable profile, which may be found on the PostNL website. We are not aware that the general meeting of shareholders wishes to use its authority to make a recommendation. We, therefore, assume that the meeting waives making any recommendations, and that takes me to the next item on the agenda. And the next item on the agenda is 8C. Disclosure by the Supervisory Board of persons nominated for appointment or reappointment. Since the general meeting of Shareholders has not recommended any other person, the Supervisory Board would like to propose Ad Melkert and Jeroen Hoencamp as members of the Supervisory Board for 4-year terms in keeping with the Corporate Governance Code 8D. Proposal to appoint Mr. Melkert to the Supervisory Board. First, the appointment of Ad Melkert. The Supervisory Board nominates Mr. Melkert as member of the Supervisory Board. Ad Melkert has extensive experience in the -- in politics and is also experienced in corporate governance. We're delighted that he is available for us. His curriculum vitae and the justification of his nomination appears in the explanatory notes to the agenda. The proposal to appoint him came about with the reinforced right of recommendation by the Central Works Council. Ad, may I ask you to briefly introduce yourself and say a bit about yourself. I hope you can do this by remote.

Yes, Chairman, can you hear me? Excellent. Well, thank you. I'll be brief. I have a background in Dutch politics, which brought me very much into contact with the whole discussion regarding relations between public and private sectors, in particular, prioritization of KPN. I remember that very clearly. And then I was involved in corporate governance in large organizations at international level, World Bank, UN. And with that experience, together with a lot of consultation of companies and government organizations, I think, has given me a sound basis on which to serve the corporate interest of PostNL. And in particular, I'm being put forward by the Central Works Council, which represents the workforce as much as possible. I can keep an eye on their interests. The shareholders' interests, the public service aspect, ecological interests. All of these things are bundled together in PostNL. And that makes it a very interesting position for me. And I look forward to working together with everyone in and surrounding PostNL.

Thank you very much. I'm looking to the audience.

I just got a comment. I think it's a real pity that Jacques Wallage is going to be leaving the PostNL Supervisory Board because he's excellent at running things. He's very responsive, and he's got a good sense of humor, which is quite a rarity. I think it's a real shame he's going, aside from the other nominations. Now regarding Mr. Hoencamp's nomination. In the old days, of course, the company was called PTT, post and telephones. Now we've got KPN going to one direction and the post will be hived off from telephones, of course. But it was Vodafone's CEO. He is now not with KPN though, or is it Vodafone worldwide? Those are the questions from me. And what is his motivation?

Well, yes, perhaps we will come on to Hoencamp in due course. We're currently discussing Ad Melkert. So we can discuss that in due course. So Mr. Melkert can I have a chance to think of his answer before we move on to his agenda item? No, I've got a question sent in by the VEB shareholders' association and [ Mr. Brookman ] and [ Mr. Browns ], who asked about Mr. Melkert's expertise, what can he contribute to PostNL? So thank you, Ad for what you've already said. See to what extent his background suits him for a membership of the Supervisory Board of PostNL? It was a very valid question. What we do in the Supervisory Board? We have a broad range of skills, which we balance carefully. And you can see the competence metrics on our website, in fact. And because of the post -- the regulatory world of which PostNL operates, political experience is of great relevance. So we present Mr. Ad Melkert as a candidate because of the various royalties carried out in the course of his CV and the skills he's built up. Mr. Melkert has extensive political experience, which means that he can actually plug a gap left by Mr. Wallage when he leaves. We are, therefore, delighted -- I'm not pleased to see the back of Mr. Wallage, but we're very glad to have Mr. Ad Melkert joining us. And I'm delighted to see he's fully available to us. His CV and the reasons for putting him forward as a candidate can be seen in the annotated agenda. Next, as we said earlier, the Central Works Council has a right to express a read-forced opinion on this topic, and that's very important. So here, I think -- I hope that we dealt with all questions. I would remind you that you can vote on the proposal to nominate Mr. Melkert as a member of the Supervisory Board. So please remember to cast your vote. Now we can't congratulate you, Ad, sorry, we'll have to wait and see. [Voting]

But now agenda item 8E, proposal to nominate Mr. Hoencamp as a member of the Supervisory Board. So Mr. Hoencamp is being presented as a candidate for membership of the Supervisory Board. Mr. Hoencamp has been a CEO of VodafoneZiggo, which has given him extensive experience of digital matters, governance matters and customer relations. We're also delighted to see he's available for us. The CV and the reasons for presenting him as candidate can be seen in the annotated agenda. Jeroen. Jeroen, can I ask you to introduce yourself briefly?

Of course. Good afternoon, ladies and gentlemen. I'm Jeroen Hoencamp, and I work at VodafoneZiggo, which is one company. I'll say a bit about that in a moment. After studying business administration at the University of Nyenrode in the '80s, I did an MBA at a U.S. University. And then I worked as a marine officer for a few years. And I also worked at several companies in the Netherlands and abroad. I've been working in telecommunications for 22 years. Since 2010, I've been CEO of Vodafone in Ireland. And then from 2013, I became CEO for Vodafone in the U.K. In that capacity, I also served on the group management of Vodafone. And since 2016, I'm back in the Netherlands, and I work as CEO of the joint venture, VodafoneZiggo. For those of you who don't know, Vodafone and Ziggo have merged in a single joint venture. I run that company, and as such, report to an independent board which, of course, entails relevant governance experience as well. I'm 53 years old. For 33 years, I've been together with my wife [ Marius ], and we have 3 children, so we've got quite a bit to do. And to answer the question, yes, I do recognize the parallel between post and telecommunications, but there is many differences as there are similarities. And I think that specifically in those difference, I have a lot to offer, so I hope to be able to contribute to accelerating digitalization that we'll all experience and I'll -- enhance customer focus. I emphasize that as well as I'll be able to contribute my corporate governance experience as well as with acquisitions and integrating acquired companies. So I believe that based on the similarities and differences between post and telecommunications, I can contribute nicely.

Thank you, Jeroen.

I imagine that answers your question, sir.

That's a fine explanation. And I'm curious how Mr. Hoencamp can assist with the digitalization of Vodafone to accelerate the solution to the corona crisis? And how can use digitalization, which might benefit PostNL to ensure that many jobs are secured at PostNL? That's my question to Mr. Hoencamp. Given his stature, I expect he'll be able to answer this properly before he gets to work. He's not a featherweight. So with his stature, this question should be a piece of cake to answer this question from a shareholder.

Jeroen, what is your response?

I'll be happy to answer. And thank you for those words of praise. I appreciate them. First of all, from my perception, PostNL is doing very well in terms of digital transformation. But given my experience from another -- from the telecommunications industry, I believe that I can contribute technical knowledge and contribute there. And I hope that I'll be able to support Herna and her team accelerate in digital respects, and I'm a strong believer in combining online with offline, i.e., digital with nondigital. And I think that, that will secure jobs at PostNL. As more goes digital, we'll also have more post and parcels. So I think that digitalization will secure the future of PostNL.

Thank you very much for your explanation.

Thank you very much. Okay, we can now proceed to the proposal to nominate Mr. Hoencamp as a member of the Supervisory Board. Please cast your vote. [Voting]

Thank you very much, Jeroen. Thank you very much, Ad. Next, informing you of vacancies in the Supervisory Board, which will arise at the end of the annual general meeting of shareholders in 2021. According to the terms of service, Thessa Menssen, Agnes Jongerius and Eelco Blok will cease to be members of the Supervisory Board at the end of Supervisory -- annual general meeting of shareholders in 2021. Agnes is still -- she's available for renomination. Thess and Eelco have said they are not available to -- not available for renomination. Therefore, the Supervisory Board will look for suitable persons to fill their places. This will then move us on to agenda Item 9, authorizing the Board of Management. 9A, authorizing the Board of Management to issue ordinary shares. This year, once again, we are proposing that the Board of Management should be nominated as body authorized to issue ordinary shares. And the taking of share rights for a period of 18 months from the date of this meeting. That is, therefore, until the 14th of October 2021. The previous nomination, which currently runs through October 2020, therefore, expires. This is an authorization requested every year. And as in previous years, the authorization shall be limited to 10% of the share at issue at the moment of issue. Are there any questions on this topic? I have one question sent in writing. Again from the VEB association of shareholders. And the question is that the purpose of this authorization is to enable the Board of Management to issue shares in order to pay any particular share dividends or any other requirement to make shares available for staff under the participation plan. If there are no further questions, I would remind you once again that you can cast your vote on this proposal. Proposal to nominate the Board of Management as the body authorized to issue shares and to grant shareholding rights from an 18-month period from the date of this meeting. Please cast your vote. [Voting]

Next, that was 9A. We're now moving on to 9B. This is nominating the Board of Management as body organized to restrict or exclude preferential rights in the issuing ordinary shares. Here again, we make a decision on this. This proposal ties in with the proposal you voted on a moment to go. The proposal is that the Supervisory Board should be nominated as the body authorized to restrict or exclude preference rights in the issuance of shares, including the right to take ordinary shares. This is for an 18-month period from today until the 14th of October 2021. This means that the current authorization, which applies until the 16th of October 2020 expires. This authorization is requested every year as well. And once again, there is a restriction of 10% of total shares that issued at the moment of issue. As far as I know, there are no questions on this. Looking to my left and right. No? Okay. No questions from the room either. Okay. So I would remind you that you can cast your vote on this proposal. [Voting]

I don't think I need to read all the wording out at this stage. Again, you can cast your vote by pressing your button. [Voting]

Next, are we going to any other business or can we get the voting results already? Item 9C, you're quite right. Authorizing the Board of Management to acquire the company's own shares. In order to be able to decide on the acquisition of own shares, the Board of Management needs to be authorized by the annual general meeting of shareholders, and this authorization lasts for a maximum of 18 months from today's date. The proposal is for the management board to be authorized to acquire the company's own shares and certificates by purchase in the stock exchange or any other way for a period of 18 months, starting from the date of this meeting, thus, up until the 14th of October 2021. This would cause the authorization granted to last until 2020 now expires. The authorization involves 10% of -- on total capital issued, always bearing in mind that the company's shareholding on its own shares are doing more than 10% of the current share issue. The purchase can take place at a purchase of at least -- purchase price of at least $0.01 and a maximum price of the current stock exchange price plus 10%. When we say the share price, we mean the average of the closing balances as published in the official price Journal of NYSE Euronext Amsterdam for the 5 working days prior to the date of purchase. Any questions on this? No. Okay. So if there are no questions. I will simply remind you once again that you may vote on this idea of agenda Item 9C, authorizing the Board of Management to acquire the company own shares from an 18-month period from today. [Voting]

Thank you. Right. Well, this brings us to the end of the meeting. Voting is now closed. And in a moment before we hear for the votes, is there anybody in the room who wishes to ask a further question or make a comment? I thought so.

I have 2 more comments. Artists don't have an easy time in the society. And sometimes, they work at PostNL to make a bit of money on the side. There was 1 artist whose art circulates the entire world. At first, he was very successful, and then he became very stubborn and started doing etchings instead of videos. And this artist was Ricardo Fuglistahler. He suddenly died at age 59 in Hengelo last year. And I think it would be a fine tribute if PostNL were to accommodate Ricardo Fuglistahler and other artists working at PostNL. And I would be happy to contribute to that. Another point is, my wife's name is Johana Bust, and her grandfather was [ Theodore Bust ]. And I'm sure you all know who [ Theodore Bust ] was. He was the Director General at the Royal PTT. I understand that he was an excellent manager and a wonderful inventor. He invented glass fiber cables. I think you would have been delighted that the present CEO of PostNL is very much attuned to Dutch private company. The fact that this CEO serves on the Supervisory Board of ING and has an important position at the NATO would probably meet with his approval. I think that this CEO's HR background is probably bearing fruit at this point. Thank you. Do you have any response to this?

I don't see here a question, just a compliment. Thank you. Okay. Ewout, so I need your help here. What do we do?

Okay. Is all the voting figures already? Okay. Let's get the results on the screen. Let's have a look. Rather -- the figures are rather small on the screen, aren't they? Yes. Okay. So we can see agenda item 3A, 99.29% in favor. Agenda item -- therefore, adopted. Agenda Item 3B, 98.98% in favor. That's, therefore, approved. Agenda Item 3C, 95.25% in favor. That's also adopted. Agenda Item 4, 99.43% in favor, therefore, approved. Now agenda Item 5B, 98.75%. Therefore, that is also approved. All of those, therefore, have proceeded. They'd be voting in favor. Now the next results on the screen. Agenda Item 6A, 99.23%, approved. Agenda Item 6B, 99.23%, that's the same figure, also approved. Agenda Item 7, 99.42% in favor, therefore approved. Agenda Item 8D, Mr. Melkert, 99.08% in favor, therefore approved. Agenda Item 8E, nomination of Mr. Hoencamp, 99.38% in favor, therefore, also approved. And the last results coming up on the screen in a moment. Should be 3 more agenda items to come. Agenda Item 9A is on the screen now, 98.55% in favor, therefore, approved. Agenda Item 9B, 98.31% in favor, therefore, approved. And agenda item 9C, 99.02% in favor, therefore, approved.

Okay. Thank you very much, Ewout. Very glad you could run through that. I can see the figures now. Yes, good. But -- and Ad and Jeroen, congratulations, 99% votes in favor of both of you. You are, therefore, now members of the Supervisory Board. Congratulations. Thank you. Finally, I would just like to say a few words of thanks to Jacques and Frank. You will be leaving us as members of the Supervisory Board at the end of this meeting. So Frank and Jacques, you've been with us 8 years and 10 years on the Supervisory Board. And Jacques was also the chair of the Supervisory Board for a while. Both of you have made a huge contribution to the company in a period that was not always at all easy for us. I got to know you as very committed and motivated people, always taking a positive approach to any discussions in the Supervisory Board or with the Board of Management. We're very grateful to you for all your work. It's a great shame that both gentlemen are not with us physically today, and we were sad that we can't give them a round of applause, which they most certainly would have deserved if they were with us in person. I hope to be able to say goodbye to them in a more personal manner on another occasion, in happier times. Well, finally, I'd just like to ask the persons in the room if they could remain seated just for a moment until we have left the room. And then if I could ask you when you leave the room, please to bear in mind that we should keep 1.5 meters distance from one another, and please follow the guidance of the members -- of the staff. Now I don't have to ask you to leave your voting handsets behind because you haven't got them this time. And I hope that you will all have a very healthy future. I wish you all to come home safe and sound. These are very difficult times. Be kind to each other. Take care of each other, help each other. Thank you very much for coming. And thank you to all of you also who joined us on the phone or on the Internet. The meeting is closed. Thank you. [Statements in English on this transcript were spoken by an interpreter present on the live call.]